Is Mt. Gox A Worry For Bitcoin? Crypto Analyst Weighs In

Keshav Verma

1 year ago

3 mins read

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Bitcoin outflows from the Mt. Gox exchange have occurred in the past day, making some worry about potential bearish effects. Here’s what an analyst thinks.

Mt. Gox Has Made Several Bitcoin Transactions In The Last 24 Hours

During the past day, several movements from wallets associated with the bankrupt cryptocurrency exchange Mt. Gox have been spotted on the Bitcoin blockchain. The platform had announced plans to repay its creditors, so the transactions are likely related to them.

Mt. Gox has moved out 137,890 BTC in total, worth almost $9.4 billion at the current cryptocurrency exchange rate. With these transfers, the market has become concerned about whether these tokens will move towards trading, adding to the selling pressure in the market.

As a result, the BTC price has fallen about 4% in the past 24 hours. While the market has reacted negatively to the news so far, some have wondered whether these withdrawals are actually going to be bearish.

Analyst James Van Straten discussed this in an X post and provided perspective on how a potential selloff arising out of these repayments would compare against another that BTC witnessed recently.

The distribution event in question is from the long-term holders (LTHs), which make up one of the two main divisions of the BTC market based on holding time.

All investors holding onto their coins since more than 155 days ago qualify for this cohort, while those who bought within the past 155 days are put in the short-term holder (STH) group.

The LTHs are considered to be the resolute side of the market, as they rarely participate in selloffs, while the STHs are the fickle-minded investors who regularly react to sector events by panic selling.

The recent rally in the asset, though, proved to be enough to move even these HODLers into selling, as the chart below shows their total supply.

Bitcoin Long-Term Holders — The value of the metric appears to have registered a steep decline over the last few months | Source: @jvs_btc on X

As the graph shows, the LTH supply has been moving sideways in the last couple of months, but it was in a state of decline for five months before that.

In this selloff, the LTHs sold around 1 million tokens, of which around 340,000 BTC was linked to GBTC outflows. At the same time, this distribution from the LTHs occurred, though the coin’s price marched to a new all-time high, implying that the market could absorb this massive selling pressure just fine.

Straten notes that the Mt. Gox repayments are only about a tenth of this selloff, and not everyone who will get these tokens will decide to sell. At the very least, everyone wouldn’t sell at the same time.

Thus, given this fact, it’s possible that Bitcoin may not be affected by this distribution if demand for the cryptocurrency remains as strong as it has been recently.

BTC Price

Bitcoin had risen above the $70,000 level earlier, but the Mt. Gox news has brought the asset down to $67,700.

Bitcoin Price Chart — Looks like the price of the coin has taken a hit over the past day | Source: BTCUSD on TradingView

Featured image from Dall-E, Glassnode.com, chart from TradingView.com

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

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