In early July, Mt. Gox, the long-defunct crypto exchange, began the process of repaying creditors affected by the 2014 hack. Interestingly, while Kraken has successfully distributed all the Bitcoin and Bitcoin Cash owed to Mt. Gox creditors, the price of the former remained stable. This stability could potentially be attributed to the cautious behavior of the creditors on Kraken, who have chosen not to immediately offload their tokens.
The news of Mt. Gox’s repayments initially sparked concerns among crypto investors, speculating that a potential mass sell-off by creditors could lead to a significant drop in prices, similar to the selling spree of confiscated BTC by Germany’s Saxony state. However, a recent analysis by CryptoQuant provides a different perspective. The on-chain crypto analytic platform revealed a significant increase in BTC withdrawals from Kraken, indicating a strong “hodling” sentiment among the recipients of the refunds.
In the past 24 hours alone, over 5,000 BTC, valued at approximately $329 million, have been transferred from the exchange to cold wallets. This shift suggests that the affected users are opting to securely store their Bitcoin for the long term, rather than engaging in immediate selling. While the volume of BTC moved may seem modest at first glance, it can be viewed as a positive signal for the market. It reflects confidence and a commitment to long-term investment strategies among these Bitcoin holders.
Additionally, CryptoQuant CEO Ki Young Ju highlighted that Kraken’s trading volume has not experienced any significant spikes following the repayments. This observation indicates that the creditors are not actively participating in selling off their Bitcoin holdings. Ju noted, “There has been no significant spike in hourly spot trading volume dominance or BTC outflows on Kraken since then.”
The ongoing repayments by Mt. Gox to its creditors have had a more subtle impact on the crypto market than initially anticipated. Contrary to fears of a market dump, the behavior of creditors on Kraken suggests a strong commitment to holding onto their Bitcoin assets. This strategic decision not only promotes market stability but also reflects a broader trend towards long-term investment and confidence in the future of cryptocurrencies.
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