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A bitcoin The exchange that collapsed 10 years ago after being hacked is set to return billions of dollars in tokens to users – and that has investors worried.

In a few days, bankrupt Tokyo-based bitcoin exchange Mt. Gox will begin returning nearly $9 billion in tokens to thousands of users. The platform went bankrupt in 2014 after a series of robberies which cost in the range of 650,000 for 950,000 bitcoin, or more than $58 billion at current prices.

The payment follows a protracted bankruptcy process that involved numerous delays and legal challenges.

On Monday, the court-appointed trustee overseeing the exchange’s bankruptcy proceedings he said Distributions to the company’s roughly 20,000 creditors would begin in early July. Disbursements would be in a mix of bitcoin and bitcoin cash, an early offshoot of the original cryptocurrency.

While this is good news for hack victims who have spent years waiting to be cured, bitcoin price fell to $59,000 last week in the cryptocurrency market second worst weekly decline Of the year.

CNBC spoke to half a dozen analysts to get the scoop on what to expect when about 141,000 bitcoins — or about 0.7% of the total 19.7 million bitcoins outstanding — are returned to Mt. Gox victims this week.

Pressure on Bitcoin May Increase

When it closed in February 2014, bitcoin was worth around $600.

Today, the world’s largest cryptocurrency is trading at around $61,000 per coin. This means that users who chose to be reimbursed in kind — that is, in the cryptocurrency itself, rather than the cash equivalent — have seen the value of their coins increase by more than 10,000% over the last decade.

John Glover, chief investment officer at crypto lending firm Ledn, told CNBC that the windfall for Mt. Gox users would likely translate into massive bitcoin selloffs as investors look to lock in gains.

“Many will clearly cash out and take advantage of the fact that having their assets tied up in the Mt. Gox bankruptcy was the best investment they ever made,” said Glover, who was previously managing director of Barclays. “Some will clearly choose to take the money and run,” Glover added.

James Butterfill, head of research at CoinShares, told CNBC that the glut of nearly $9 billion worth of bitcoin to be released “has long been a concern for those with bullish views on bitcoin.”

“Consequently, the market is highly sensitive to any related news. With the announcement that the Trust will begin selling in July, investors are understandably concerned,” Butterfill said.

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It wouldn’t be the first time bitcoin has moved in reaction to large redemptions of funds blocked on centralized trading platforms.

Last month, exchange Gemini returned more than $2 billion worth of bitcoin to users with funds that were stuck in its Earn lending program, marking a 230% recovery after bitcoin prices more than tripled since Gemini suspended Earn withdrawals on Nov. 16.

Analysts at JPMorgan attributed this to negative price action, saying in a research note last week that “it is fair to assume that some of Gemini’s lenders, which are primarily retail clients, have taken at least partial profits in recent weeks.”

Similarly, JPMorgan analysts expect Mt. Gox customers to be similarly inclined to sell some of their bitcoins to cash in on the cryptocurrency’s seismic gains.

“Assuming most of Mt. Gox’s creditor settlements occur in July, [this] creates a trajectory where cryptocurrency prices come under more pressure in July, but begin to recover from August onwards,” they wrote.

Separately, last month, the German government sold 5,000 — valued at roughly $305.8 million at Thursday prices — of a pile of 50,000 bitcoins seized in connection with the Movi2k movie piracy operation.

The funds were sent to several cryptocurrency exchanges, including Coinbase, Kraken and Bitstamp, according to blockchain intelligence company Arkham Intelligence.

Analysts say these crypto sell-offs have also put pressure on the price of bitcoin.

Mt. Gox customers expect to keep their bitcoin

“Many of the early adopters of Mt. Gox, as well as lenders, are long-term bitcoin enthusiasts who are less likely to sell all their bitcoins immediately,” he said, adding that previous sales by authorities have been made. including the Silk Road casedid not result in a sustained catastrophic fall in prices.

Butterfill suggested that there is enough market liquidity to cushion the impact of any potential mass selling action.

“Bitcoin has maintained a daily trading volume of $8.74 billion on reputable exchanges this year, suggesting that liquidity is sufficient to absorb these selloffs during the summer months,” Butterfill said.

According to CCData research analyst Jacob Joseph, markets are more than capable of absorbing selling pressure.

“In addition, a healthy portion of creditors will likely accept a 10% haircut on their assets to get paid early, and not all assets will be liquidated in the open market, reducing overall selling pressure,” he said.

Recent price movements suggest the temporary impact of the Mt. Gox refunds may already be priced in, Joseph added.

Galaxy Digital’s head of research, Alex Thorn, believes that fewer coins will be distributed than people think, meaning there will be less selling pressure than the market expects.

However, he also wrote in May that even if only 10% of the distributed bitcoin is sold, “it will have an impact on the market.”

“Most individual lenders will have their coins deposited directly into a trading account on an exchange, making it extremely easy to sell,” Thorn said.

Vijay Ayyar, head of consumer growth for Asia-Pacific at cryptocurrency exchange Gemini, said the overall impact of the Mt. Gox disbursement is likely to be “dissipated” as the recipients of the funds are varied.

On the one hand, there are individual holders who will receive their bitcoin immediately. Then there is the “significant amount” of bitcoin that will be disbursed to claims funds, Ayyar said.

“These funds would then need to distribute them to their LPs [limited partners]therefore, the entire process may take a while, adding a time element to the price impact,” he told CNBC.

Macro headwinds behind bitcoin’s decline

The cryptocurrency made an impressive recovery earlier this year, exceeding US$ 70,000 shortly after the US Securities and Exchange Commission approved the first spot bitcoin ETF.

Stock chart iconStock chart icon

Bitcoin price performance in US dollars, year to date.

But investors remained anxious amid outflows from bitcoin ETFs and sizable market sell-offs. The broader macro environment has also left investors worried.

Earlier this month, the Federal Reserve suggested it plans to cut rates just once this year, down from the multiple cuts previously indicated.

Cryptocurrencies, which are inherently volatile, are particularly sensitive to changes in the interest rate environment.

CoinShares’ Butterfill said the Fed’s new rate forecast was among “the likely culprits for the recent price decline” of bitcoin.

This, along with other issues, “will likely weigh on prices in the summer months with lower volume,” Butterfill said. However, “the fundamental investment case remains largely intact,” he added.

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