KEY POINTS
- The defunct crypto exchange previously said repayments will begin this month
- CryptoQuant's CEO said Bitcoin prices are 'in the clear' if MtGox goes for OTC selling
- Samson Mow said the billions worth of $BTC MtGox holds are not necessarily being sold
- An investor said the crypto market may be 'overestimating' MtGox's dump
MtGox, the collapsed cryptocurrency exchange giant that will repay its many creditors in billions worth of Bitcoin, has triggered a wave of fear among holders of the world's top digital asset by market value. However, some industry experts said the exchange's repayment activity will not affect $BTC prices.
Repayments due in October
MtGox has an Oct. 31, 2024 deadline for repaying its creditors following its collapse in 2014. At the time, it lost some 750,000 $BTC owned by its users and approximately 100,000 of its own Bitcoin treasury to exploits and other security-related incidents.
It announced last month that it will start repaying customers in July. Late last week, blockchain analytics firm Arkham Intelligence revealed that the defunct crypto exchange moved 47,228 $BTC worth around $2.71 billion at the time of the transfer from cold storage to a new wallet.
BREAKING
— Arkham (@ArkhamIntel) July 5, 2024
Mt Gox moves 47,228 BTC ($2.71 billion dollars) from cold storage to a new wallet. pic.twitter.com/3ZdSlC1IX2
FUD over MtGox repayments
Bitcoiners have expressed fear, uncertainty, and doubt (FUD) over the possible impact of the massive movement of Bitcoins during the repayment period. The $BTC community was especially down after MtGox transferred some $10 billion worth of the digital currency within a period of just seven hours in May.
The concerns of Bitcoin holders stem from the notion that the massive dump could pull down prices, especially with the German government also selling off its multibillion-dollar treasury of seized Bitcoins.
OTC selling puts $BTC 'in the clear'
Ki Young Ju, the founder and CEO of on-chain and crypto market analytics firm CryptoQuant, said late Monday that the recent movement of over $2 billion in Bitcoins by the collapsed exchange "won't affect the price [of Bitcoin]."
Mt. Gox moved 47K #Bitcoin, but it won't affect the price.
— Ki Young Ju (@ki_young_ju) July 8, 2024
Three possible scenarios for these transactions:
1. Internal transfer: Changing wallets for security.
2. OTC deal: Designed not to affect the market price.
3. Using a brokerage service: Likely settled after selling… pic.twitter.com/9xS1zoqfHH
In particular, Ki believes that over-the-counter (OTC) selling will put the $BTC community "in the clear," since the said method of dumping digital currencies is "designed not to affect the market price."
He went on to note that 1,500 Bitcoins went to centralized exchange Bitbank and yet there was no significant surge in trading volume in the market so far.
MtGox isn't necessarily selling?
For Bitcoin maximalist Samson Mow, the community should "stop fixating on Gox coins." He pointed out that the thousands of $BTC for repayments "are being distributed, not necessarily sold." Mow was the former chief strategy officer at leading Bitcoin and blockchain technologies firm Blockstream.
I don’t know who needs to hear this, but millions of @BTC can be sold at anytime.
— Samson Mow (@Excellion) July 7, 2024
Anyone that holds #Bitcoin can sell it. AT ANY TIME.
Stop fixating on Gox coins. First, it’s a drop in the bucket. Second, those coins are being distributed, not necessarily sold.
The fact is…
An 'overestimation' of the MtGox situation?
A Bitcoin investor who goes by Vinnie James raised an issue that some analysts have been trying to point out since news of the MtGox dump emerged. "Markets seem to be hugely overestimating the MtGox sell off."
Markets seem to be hugely over estimating the #MtGox sell off. It’s important to remember the fact this loss happened 10 years ago in 2014. At the time the price of a whole #Bitcoin was less than $1000, and most folks hodling then paid much less.
— vinniejames.eth (@0xVinnieJames) July 5, 2024
Bitcoiners at the time were also…
The investor noted that it is likely the exchange's activities around its repayments account for "a very small percentage" of the amount of Bitcoins recipients actually hold today.
Bitcoin, the world's first decentralized digital asset, reclaimed $57,000 Monday and started the weak in the green following a week that beat the coin down to $54,000.
