Why Mt. Gox Creditors Are Holding Bitcoin Despite $4 Billion Payout

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As of July 24, over 41.5% of the total Bitcoin owed to Mt. Gox creditors has been distributed. This amounts to approximately 59,000 BTC out of 141,686 BTC, valued at nearly $4 billion. Despite this substantial distribution, creditors are not rushing to sell their holdings. A recent Glassnode report indicates that creditors who opted for BTC instead of fiat are largely holding onto their assets. 

Creditors holding their assets open a new story. What could this mean for the market? Are they waiting for the perfect moment, or is there more to this story? Let’s Step in

Distribution History

Mt. Gox, once a leading Bitcoin exchange processing more than 70% of all Bitcoin transactions, collapsed in 2014 following a hack that resulted in the loss of 850,000 BTC. Since then, approximately 127,000 creditors have been waiting to recover their funds. The distribution process was completed by Kraken on July 24, yet there has been no significant uptick in selling pressure on the exchange.

Investors in dilemma to sell or keep holding? 

A recent Glassnode report suggests that the majority of creditors are holding their Bitcoin, opting for BTC instead of fiat—a new option under Japanese bankruptcy law. This shows that only a few of these distributed coins are likely to be sold on the market. Glassnode’s analysis, while speculative, is supported by exchange data, showing no significant increase in spot cumulative volume delta (CVD) on Kraken post-distribution.

Change in Investor Behavior

However, the lack of significant sell-offs aligns with a broader trend among Bitcoin investors. Over the past decade, Bitcoin’s price has surged over 8,500%, yet the proportion of Bitcoin held for long-term investment remains high. Currently, over 65.8% of Bitcoin has been inactive for over a year, and more than 54% has been dormant for over two years. This trend reflects a shift towards “hodling,” or holding Bitcoin for the long term, rather than selling.

Conclusion

Generally, despite the massive distribution of Bitcoin to Mt. Gox creditors, the market has not experienced the anticipated sell pressure. The ongoing trend of long-term holding among investors suggests that Bitcoin remains a valuable asset for those who prefer to retain their holdings despite market fluctuations.