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Many Mt. Gox creditors have finally been repaid their Bitcoin (BTC) after a decade of waiting. News reports have shown many creditors have been repaid through the US-based crypto exchange Kraken. As expected, the news of more BTC potentially flooding the market has led to concerns about its effects on the price of Bitcoin. Analysts and investors alike have expressed concerns that the influx of Bitcoin into the market could result in increased selling pressure, potentially driving down the price of the cryptocurrency.
However, data reports have shown many of the repaid creditors are opting to hold their assets rather than selling them. This trend reflects a prevailing bullish sentiment among these BTC holders, who appear confident in the long-term potential of the cryptocurrency.
Despite the bullish mentality, on-chain data suggests Mt. Gov still has enough BTC to potentially flood the market. According to Arkham Intelligence, the defunct exchange still has over 80,000 BTC, which is valued at approximately $5.37 billion at the current price of Bitcoin.
Analyzing Mt. Gox’s Bitcoin Holdings
Bitcoin is not out of the woods yet from the hands of Mt. Gox. As shown by Arkham’s dashboard, Mt Gox’s BTC holding has fallen from 142,000 BTC at the start of July to 80,000 BTC at the time of writing. This indicates over 62,000 BTC have been distributed to its creditors in the past three weeks.
While some creditors have chosen to hold their Bitcoin, many have undoubtedly taken the chance to cash out after a decade of waiting. This wave of selling contributed to a $170 billion wipeout from the crypto market when Bitcoin fell below $54,000. Many might argue this was an overreaction from other market participants, as many rushed to reduce their exposure even before creditors initiated any selloffs. Interestingly, Bitcoin was under intense pressure from a concurrent selloff of seized Bitcoins by the German State of Saxony.
The initial fear and uncertainty have since cooled down, even though on-chain data shows that Mt. Gox creditors continue to receive repayments. Notably, Arkham’s data indicates approximately 0.02 BTC were recently sent to eight Bitstamp deposit addresses, another exchange being used for these repayments. Similarly, CryptoQuant CEO Ki Young Ju revealed that these repayments have not led to a spike in spot trading volume dominance on Kraken.
So far, Mt. Gox has managed the repayments effectively, mitigating selling pressure. Bitcoin has also responded positively, demonstrating stability and growing maturity that have helped prevent further declines. Mt. Gox still holds 80,128 BTC in its wallet. We will see how the market reacts as the repayments unfold in the next few weeks. At the time of writing, Bitcoin is trading at $67,085, up by 5% in the past 24 hours.
Featured image created with Dall.E, chart from Tradingview.com
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