Mt. Gox’s dormancy may persist, but a recent movement of tokens from its wallets has drawn market attention. Approximately 137,890 BTC, valued at $9.4 billion, is expected to be transferred to creditors, prompting mixed reactions from experts concerned about potential selling pressure and a subsequent drop in Bitcoin’s price.

Once the world’s leading Bitcoin exchange, Mt. Gox was hacked in 2014, resulting in the loss of over 850,000 BTC. After years of legal proceedings, Japanese authorities approved a rehabilitation plan in 2021, allowing creditors to recover a portion of their lost funds.

This plan has come into effect, with creditors now receiving some of the remaining funds. The planned repayments from Mt. Gox may have contributed to a 4% decline in Bitcoin’s price over the past 24 hours, though the market eventually rebounded. However, concerns remain that the influx of these coins could lead to a selloff, further driving down the price.

Former Mt. Gox CEO Mark Karpeles confirmed in an official statement that while Bitcoin sell-offs are not currently happening, the movement of tokens to a new wallet is part of the plan to distribute funds to creditors.

Understanding Long-Term Holders (LTHs) and Short-Term Holders (STHs):

- LTHs: Investors holding Bitcoin for over 155 days, generally more resolute and less likely to panic sell.

- STHs: Investors holding Bitcoin for less than 155 days, more reactive to market news and more likely to sell during negative sentiment.

Historical LTH Selloff vs. Mt. Gox Repayments:

CryptoSlate Senior Analyst James Van Straten noted that Grayscale Bitcoin Trust and LTHs sold around 1 million BTC in the last five months. The market absorbed these sell-offs well, suggesting that Mt. Gox’s repayments, which would be about 1/10th of this amount, might have a lesser impact.

Recent data from Glassnode indicated that the number of Bitcoin addresses holding coins for over 5 years reached a new low, suggesting long-term investors were taking profits. This raises concerns that Mt. Gox creditors might sell their recovered coins, potentially flooding the market and lowering prices.

However, not all creditors are expected to sell their Bitcoin immediately, and the distribution has not yet formally begun. Some creditors may choose to hold or even buy more, depending on their investment strategies. While there might be short-term negative reactions, the long-term impact of the repayments could be positive, potentially leading to increased institutional adoption and improved investor confidence.

Conclusion:

The Mt. Gox situation highlights potential issues in market stability. Short-term volatility is expected, but increased liquidity and market stability could boost investor confidence and have positive long-term implications for Bitcoin’s performance.