Nearly half of the Bitcoin owed to creditors of the defunct Mt. Gox exchange has been distributed, with many creditors choosing to hold onto their coins after a decade of waiting, according to a July 29 report by Glassnode. The report indicates that 41.5% (59,000 BTC) of the total 141,686 Bitcoin has been redistributed, but despite receiving nearly $4 billion worth of Bitcoin, most creditors are not selling.
Mt. Gox Creditors Opt to Hold Bitcoin
The creditors, owed approximately $9.4 billion worth of Bitcoin, have been waiting for over ten years to recover their funds. This long wait had the potential to create significant sell pressure that could impact Bitcoin’s price. However, Glassnode’s report suggests that the creditors’ decision to receive Bitcoin instead of fiat currency, a new option under Japanese bankruptcy law, means that many are choosing to hold onto their distributed coins rather than sell them.
Impact on Market Dynamics
Despite the distribution, there has been no significant uptick in sell-side pressure on exchanges like Kraken, which completed its Bitcoin distribution to Mt. Gox creditors on July 24. The spot cumulative volume delta (CVD) on Kraken shows only a marginal increase in sell pressure, remaining within typical day-to-day ranges. This is noteworthy given that Bitcoin’s price has surged by over 8,500% since Mt. Gox’s collapse in 2014.
Historical Context of Mt. Gox
Mt. Gox was once a leading Bitcoin exchange, handling over 70% of all Bitcoin transactions at its peak before collapsing in 2014 following a major hack that resulted in the loss of 850,000 BTC. The current distribution of Bitcoin to creditors suggests that investors are opting to hold their coins, reflecting the cryptocurrency community’s “hodling” strategy.
Continued Inflows in Digital Asset Products
Meanwhile, the digital asset investment landscape remains robust, with inflows maintaining a positive trend for the fourth consecutive week. The sector saw an influx of $245 million last week, with year-to-date (YTD) inflows reaching a record $20.5 billion. Bitcoin products alone attracted $519 million in inflows last week, bringing the month-to-date total to $3.6 billion and YTD inflows to $19 billion. This surge in investment is influenced by the political climate in the US and the anticipation of a potential rate cut by the Federal Reserve in September 2024.
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