Bitrabo Editorial
A recent movement of 47,000 Bitcoins by the defunct exchange Mt. Gox has raised concerns within the crypto community regarding its potential impact on the market. However, Ki Young Ju, the founder of Cryptoquant, has shared insights into why this transfer may not significantly affect Bitcoin’s price.
Reasons Why the Transfer Won’t Affect Bitcoin’s Price
In a recent post on X, Ki Young Ju outlined three possible scenarios to explain why Mt. Gox’s Bitcoin transactions are unlikely to influence the market. Firstly, he suggested that the transfers might have been internal, involving a switch of wallets for security purposes.
Secondly, Ki Young Ju indicated that the transactions could have been over-the-counter (OTC) deals, which are designed not to impact market prices. Given Mt. Gox’s substantial Bitcoin holdings, facilitating repayments through OTC trades seems plausible to avoid adverse market effects.
Regarding the third scenario, Ki Young Ju mentioned the possibility of Mt. Gox using a brokerage service post-sale, as the Bitcoins did not pass through intermediary wallets or exchanges. Despite some Bitcoin being sent to Bitbank, the absence of a significant surge in trading volume suggests that Mt. Gox’s sales may not disrupt the market significantly.
While acknowledging that a relatively small amount of 1,500 BTC was sent, Ki Young Ju noted the availability of 94,000 BTC for sell-side liquidity under scenario 3. However, he expressed confidence that this was unlikely to occur, emphasizing the necessity of on-chain movement for such large Bitcoin sales. He also highlighted that an OTC trade would indicate stability in the market.
Monitoring Other Entities
Although Ki Young Ju’s analysis indicates minimal impact from Mt. Gox’s transactions, attention should be paid to the actions of the German government, which has been steadily selling off its Bitcoin holdings. Recent data from Arkham Intelligence revealed significant BTC transfers to various crypto exchanges by the German government, despite still holding over 27,000 BTC worth $1.57 billion. Continued sell-offs by the German government could potentially impact the market.
As of the latest update, Bitcoin is trading at approximately $57,500, showing a 3% increase in value over the past 24 hours, according to data from CoinMarketCap.