Scott Matherson
Defunct crypto exchange Mt. Gox’s recent Bitcoin transfers have continued to cause concerns for the crypto community, considering the amount of selling pressure they could place on the flagship crypto. However, Cryptoquant’s founder, Ki Young Ju, has helped to ease these concerns, recently explaining why these transactions might not affect the market.
Why Mt Gox’s 47,000 BTC Move Won’t Affect Bitcoin’s Price
In an X (formerly Twitter) post, Ki Young Ju outlined three possible scenarios for Mt Gox’s Bitcoin transactions to explain why it won’t affect its price. First, he stated that these Bitcoin transactions may have simply been an internal transfer, with the defunct crypto exchange switching wallets for security reasons.
Secondly, he mentioned that the transaction might have been an over-the-counter (OTC) deal, with such trades designed not to affect market price. Given the magnitude of Mt Gox’s Bitcoin holdings, this also seems feasible since the crypto exchange will be looking to facilitate repayments without their actions having severe impacts on the market.
For the third scenario, Ki Young Ju mentioned that Mt. Gox might have used a brokerage service after the sale was finalized since these bitcoins didn’t pass through brokers’ wallets or exchanges. Meanwhile, the Cryptoquant founder also alluded to the fact that 1,500 BTC was sent to Bitbank, but there was still no significant surge in trading volume, which suggests that Mt. Gox sales are unlikely to affect the market.
However, he admitted that 1,500 BTC is a relatively small amount, which may have explained the lack of a notable surge in trading volume. Ki Young Ju noted that 94,000 BTC is available for sell-side liquidity if scenario 3 applies. However, he seemed confident that this was unlikely to be the case, as he mentioned that it is impossible to sell this much BTC without on-chain movement. Meanwhile, he added that an OTC trade means that the market is in the clear.
Another Entity To Still Be Concerned About
While Ki Young Ju’s analysis suggests that Mt. Gox’s transactions are unlikely to affect the market, the Geman government is another entity to be concerned about. They have been offloading their Bitcoin holdings since last month, and recent on-chain data suggests that they might not be slowing down anytime soon.
On-chain analytics platform Arkham Intelligence revealed that the German government sent over 13,000 BTC to various crypto exchanges and makers on July 8, including Coinbase, Kraken, and Bitstamp. Despite these transfers, the German government still holds over 27,000 BTC ($1).57 billion). This is something to keep an eye on, especially if they still plan to offload a significant amount of their remaining holdings.
At the time of writing, Bitcoin is trading at around $57,500, up over 3% in the last 24 hours, according to data from CoinMarketCap.
Featured image created with Dall.E, chart from Tradingview.com
