decrypt.co
The long-awaited Mt. Gox repayments are underway, and while some Bitcoin investors feared a massive selloff that could drive down prices, early signs suggest that users are opting to hold onto their recovered coins.
According to data from CryptoQuant, there has been a notable increase in Bitcoin withdrawals from Kraken, one of the exchanges handling the repayments. Over 5,000 BTC—valued at approximately $329 million—has been withdrawn in the past 24 hours.
Rather than immediately cashing out, many recipients may move their recovered assets to self-custody wallets and continue to hold them.
"The user behavior of withdrawing Bitcoin off the exchanges and moving them to secure cold wallets signals increasing awareness of security and safety of asset custody," EmpowerEdge Ventures founder Sharat Chandra told Decrypt.
He added that while some selling pressure cannot be ruled out, long-term holders will likely continue accumulating Bitcoin, potentially mitigating any significant price drops.
Even so, having so much Bitcoin on the move is sure to have some impact on the market.
Arkham Intelligence reported that Mt. Gox representatives transferred 32,371 BTC (about $2.13 billion) to an unmarked address yesterday, followed by smaller transfers to Bitstamp and another unmarked address. These movements are part of the exchange's repayment plan, which distributes funds across multiple platforms, which then distribute them to users.
Raj A. Kapoor, founder of the Blockchain Governance Council, told Decrypt that the repayment has had some impact on Bitcoin's price, but that the leading cryptocurrency is "quickly settling down to a strong support zone."
Bitcoin is currently priced at $66,775 as of this writing, per data from CoinGecko. Kapoor identified a critical support level for Bitcoin between $63,000 and $65,000, with technical indicators suggesting a possible rebound to around $67,000.
Despite initial concerns about potential selling pressure, many experts believe the market can absorb the influx of Bitcoin without major disruptions.
Eneko Knörr, CEO of stablecoin issuer Stabolut, pointed out that the repayments will be distributed in multiple tranches across various exchanges, which should help mitigate immediate risks.
Knörr added that the German government's recent sale of nearly $3 billion worth of Bitcoin did not lead to significant price declines, indicating that the market can absorb such transactions without major disruptions.
“Based on this precedent, the Mt. Gox effect is unlikely to have a substantial impact on Bitcoin prices,” he said.
Marko Jurina, CEO of multi-chain exchange Jumper, offered a broader perspective on the current market conditions.
"Since March, the market has remained range-bound, indicating either resilience or an accumulation phase," Jurina said.
He also highlighted April’s Bitcoin halving event as a historically bullish catalyst, which could set the stage for potential price appreciation in the mid-term, combined with declining exchange reserves and increased cold storage.
As the repayment process continues, Kraken has confirmed the successful distribution of Bitcoin and Bitcoin Cash to creditors, with users on Reddit reporting receipt of funds. Bitstamp users, however, may still be waiting.