Over 41.5% of Mt. Gox Bitcoin Distributed as Creditors Continue to Hold

In the aftermath of the Mt. Gox collapse, creditors have received over $4 billion worth of Bitcoin, which has witnessed an impressive appreciation of over 8,500% over the past decade. Despite this, many of these creditors are choosing to retain their Bitcoin rather than sell.

As of now, more than 41.5%, equating to 59,000 Bitcoin (BTC) out of a total of 141,686 BTC, has been redistributed to the creditors impacted by the defunct Mt. Gox exchange.

According to a recent report from Glassnode dated July 29, despite the substantial distribution of Bitcoin, creditors are holding onto their assets:

“Creditors opted to receive BTC rather than fiat, which was a new provision in Japanese bankruptcy law. It is likely that only a small portion of these distributed coins will actually be sold on the market.”

Approximately 127,000 Mt. Gox creditors have been waiting for over 10 years to recoup an estimated $9.4 billion worth of Bitcoin, which poses a potential risk of significant sell pressure that could adversely affect Bitcoin’s market price.

Recently, Kraken completed the distribution of Bitcoin to Mt. Gox creditors on July 24, further highlighting the ongoing scenario.

The Collapse and Legacy of Mt. Gox

Once a leading Bitcoin exchange in Japan, Mt. Gox was established in 2010 and accounted for over 70% of Bitcoin transactions at its peak. However, the exchange went under in 2014 following a major security breach, resulting in the loss of 850,000 BTC, marking it as one of the most significant hacks in cryptocurrency history.

Analysis of Mt. Gox Creditors’ Selling Behavior

While the Glassnode report mentions some speculative elements regarding creditor behavior, data from cryptocurrency exchanges supports the notion that Mt. Gox creditors are primarily holding their Bitcoin:

Notably, the cumulative volume delta (CVD) for spot trading on centralized exchanges, particularly Kraken, has not shown a pronounced increase following the distribution of Bitcoin.

As mentioned in the report:

“A slight increase in sell-side pressure has been observed after the distribution, however, it remains within the typical daily ranges.”

The limited selling activity comes as a surprise, especially given that Bitcoin has surged in value by over 8,500% since the collapse of Mt. Gox.

Shift Toward Hodling Among Bitcoin Investors

The ongoing distribution of Bitcoin reveals a trend where investors appear to be moving away from selling and instead returning to a “hodling” strategy, a term that signifies holding onto an asset for the long term.

The data reflects that the share of Bitcoin held by newer investors has notably decreased, which is reminiscent of behavior observed near significant market peaks.

This indicates an overarching shift in investor sentiment toward holding rather than trading, as stated by Glassnode:

“This trend illustrates that long-term investors are selling or spending coins to meet new demand leading up to the $73k all-time high. The rate of decline in this metric has recently slowed, indicating a gradual shift back to a hodling-dominant behavior among investors.”

Currently, over 65.8% of the Bitcoin supply has remained inactive for more than a year, while more than 54% has not moved for over two years.

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