Mt. Gox Cryptocurrency Exchange Shuts Down recent Bitcoin transfers continue to raise concerns in the cryptocurrency community, given the amount of selling pressure they could exert on the flagship cryptocurrency. However, Cryptoquant Founder, Ki Newborn Juhelped ease those concerns by recently explaining why these deals might not have an impact on the market.
Why Mt Gox’s 47,000 BTC Move Won’t Impact Bitcoin Price
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Secondly, he mentioned that the transaction could have been an over-the-counter (OTC) transaction, and such transactions were intended not to affect the market price. Given the scale of Mt Gox’s Bitcoin holdings, this also seems feasible, as the cryptocurrency exchange would want make repayments easier without their actions having a significant impact on the market.
In the third scenario, Ki Newborn Ju mentioned that Mt. Gox could have used a brokerage after the sale was completed, since those bitcoins did not go through broker wallets or exchanges. Meanwhile, Founder of Cryptoquant he also mentioned the fact that 1,500 BTC was sent to Bitbank, but there was still no significant boost in trading volume, suggesting that the Mt. Gox sale is unlikely to impact the market.
He did admit, however, that 1,500 BTC is a relatively compact amount, which may explain the lack of noticeable boost in trading volume. Ki Newborn Ju noted that 94,000 BTC is available for sell-side liquidity if scenario 3 applies. However, he seemed convinced that this is unlikely, as he mentioned that it is not possible to sell that much BTC without an on-chain movement. Meanwhile, he added that Over-the-counter trading means the market is clear.
Another entity that still raises concerns
While Ki Newborn Ju’s analysis suggests that Mt. Gox’s trades are unlikely to impact the market, German government is another entity to worry about. They have been selling their Bitcoin holdings for the past month, and recent on-chain data suggests they have no plans to ponderous down anytime soon.
Chain Analytics Platform Arkham Interview revealed That German government sent over 13,000 BTC to various cryptocurrency exchanges and developers on July 8, including Coinbase, Kraken, and Bitstamp. Despite these transfers, the German government still holds over 27,000 BTC ($1.57 billion). This is worth keeping in mind, especially if they still plan to get rid of a significant portion of their remaining shares.
At the time of writing, Bitcoin is trading at around $57,500, up more than 3% in the past 24 hours, according to data data from CoinMarketCap.
Featured image created with Dall.E, chart from Tradingview.com
