Author: Murtuza Merchant
Translation: Plain Blockchain
Despite concerns about a large transfer of Bitcoin triggering sell-offs, experts say the impact may not be as severe.
The long-awaited Mt. Gox repayment is underway, and while some Bitcoin investors are concerned about potential large-scale sell-offs leading to price declines, early signs indicate that users are inclined to hold onto the coins they recover.
According to data from CryptoQuant, as one of the platforms processing the repayment, the Bitcoin withdrawal volume from Kraken has significantly increased. Over the past 24 hours, over 5,000 Bitcoins (approximately $329 million) have been withdrawn.
Many recipients have not immediately cashed out, but instead transferred the recovered assets to self-custody wallets to continue holding.
"Users withdrawing Bitcoin from exchanges and transferring to secure cold wallets indicate an increasing emphasis on the security and safeguarding of asset custody," said Sharat Chandra, founder of EmpowerEdge Ventures, to Decrypt.
He added that while some selling pressure cannot be ruled out, long-term holders may continue to accumulate Bitcoin, which could mitigate large-scale price declines.
Nevertheless, the movement of such a large amount of Bitcoin is bound to have some impact on the market.
An Arkham Intelligence report stated that representatives of Mt. Gox transferred 32,371 Bitcoins (approximately $2.13 billion) to an unmarked address yesterday, followed by small-scale transfers to Bitstamp and another unmarked address. These transfers are part of the exchange's repayment plan, with funds being dispersed to multiple platforms and then distributed to users.
Raj A. Kapoor, founder of the Blockchain Governance Council, told Decrypt that this repayment has had some impact on the Bitcoin price, but the leading cryptocurrency "quickly stabilized in a strong support range."
According to CoinGecko's data, at the time of writing, the price of Bitcoin is $66,775. Kapoor believes that the key support level for Bitcoin is between $63,000 and $65,000, and technical indicators suggest a potential rebound to around $67,000.
Despite initial concerns about potential selling pressure, many experts believe the market can absorb the influx of Bitcoin without significant turmoil.
Eneko Knörr, CEO of stablecoin issuance company Stabolut, pointed out that these repayments will be distributed across major exchanges in multiple batches, which helps mitigate immediate risks.
Knörr added that the recent sale of nearly $3 billion worth of Bitcoin by the German government did not lead to significant price declines, indicating that the market can absorb such transactions without major turmoil.
"Based on this precedent, the impact of Mt. Gox is unlikely to have a significant effect on the price of Bitcoin," he said.
Marko Jurina, CEO of the multi-chain trading platform Jumper, provided a broader perspective on the current market situation.
"Since March, the market has been oscillating within a range, indicating either resilience or accumulation in the market," Jurina said.
He also pointed out that the Bitcoin halving event in April, as a historically bullish catalyst, may lay the foundation for a mid-term price increase, coupled with a decrease in exchange reserves and an increase in cold wallets.
As the repayment process progresses, Kraken has confirmed the successful distribution of Bitcoin and Bitcoin Cash to creditors, and users on Reddit have also reported receiving funds. However, users of Bitstamp may still be waiting.
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