Why The Mt. Gox Impact on BTC Markets Is Overestimated
On July 17, the founder and CEO of on-chain analytics firm CryptoQuant told his 355,000 X followers that the Mt. Gox FUD is overestimated.
He referenced a growth rate chart stating that Bitcoin market capitalization increase is outpacing realized capitalization growth, “showing strong demand.”
Since last year, $224 billion in Bitcoin sold, yet prices are up 350%, he added.
MtGox FUD is overestimated.
Market cap growth outpaces realized cap growth, showing strong demand. Since 2023, $224B in #Bitcoin sold, yet price up 350%.
Even if MtGox’s $3B is sold on Kraken, it’s just 1% of the realized cap increase in this bull cycle — manageable liquidity. https://t.co/IUtw2pY6Am pic.twitter.com/pWqWhM0i9Z
— Ki Young Ju (@ki_young_ju) July 16, 2024
The Mt. Gox Impact
Ki Young Ju added that even if Mt. Gox’s $3 billion worth is sold on Kraken, it is just 1% of the realized cap increase in this bull cycle, which is “manageable liquidity.” Realized capitalization is a variation of market capitalization that values each transaction based on the price when it was last moved, as opposed to its current value.
More than a third of the Bitcoin owed to creditors of the defunct exchange has already been distributed, according to CryptoQuant, which reported a figure of 36% distribution on July 17.
“The trustee holds 141,686 BTC, which will be distributed over time,” it added.
On July 16, Mt. Gox moved 48,641 BTC worth around $3 billion from its cold wallet address to a wallet at the Kraken exchange, according to analytics platform Arkham.
At the time, Kraken stated that it had successfully received creditor funds (BTC and BCH) from the Mt. Gox Trustee. “While we will work to distribute funds as quickly as possible, please anticipate 7-14 days for funds to be credited to your account,” it added.
According to Arkham Intelligence, the Mt. Gox-linked wallet still contains 90,344 BTC worth around $5.87 billion at current prices.
BTC Recipients Targeted
In related news, a number of Reddit users have reported brute-force attacks on their Mt. Gox accounts or hackers trying to infiltrate their Kraken accounts. With potentially large amounts of BTC landing in the accounts of Mt. Gox users, they have become prime targets for scammers and hackers.
Aside from the dip to $62,500 earlier this week, BTC prices have held up and remained consolidating around the $65,000 level for the past two days.
Just as they did following the German government selloff, markets are likely to absorb the impact. However, BTC needs to overcome resistance at $66,000 for the trend reversal to be confirmed and further gains to be made.
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