As a seasoned researcher with extensive experience in the cryptocurrency market, I have closely monitored the recent surge in Bitcoin (BTC) flows into crypto exchanges. My analysis reveals that this trend is primarily driven by creditor distributions from the rehabilitation trustee of the defunct Mt. Gox exchange.


Starting this month, there has been a noticeable increase in Bitcoin (BTC) being transferred into cryptocurrency exchanges. The primary cause of this trend is creditor distributions from the rehabilitation trustee overseeing the bankruptcy case of the former Bitcoin trading platform, Mt. Gox.

According to IntoTheBlock’s blockchain analysis, the exchange inflow of Bitcoin reached a peak of $2.8 billion on July 25 – marking the highest level seen in a year. A comparable amount flowed into trading platforms around mid-March, approximately two months following the launch of the US Bitcoin spot ETF market.

Mt. Gox Deposits Drive Exchange Flows

Over the past two weeks, the trustee overseeing the affairs of defunct cryptocurrency exchange Mt. Gox has moved vast amounts of bitcoins, valued at approximately $3.1 billion, to exchanges Kraken and Bitstamp. Kraken has since concluded the distribution process for these bitcoins, allocating them to both users who were former creditors of Mt. Gox and victims of the exchange’s infamous 2014 hack.

Bitstamp has received and started distributing part of the repayment funds as of July 25. The exchange warned users that payouts to their wallets could take up to a week due to rigorous security checks aimed at preventing breaches. The precise amount of assets acquired by Bitstamp has yet to be disclosed, but on-chain analysis indicates it might exceed $1 billion.

In addition to transferring funds to Kraken and Bitstamp, the Mt. Gox trustee has also been transferring substantial amounts to unidentified addresses. These transactions are likely part of the trustee’s plan to distribute Bitcoin to other exchanges as outlined in their creditor redemption process. According to CryptoPotato’s report on July 24, a wallet associated with Mt. Gox moved approximately $2.47 billion worth of Bitcoin to an anonymous wallet.

Mt. Gox Users Are HODLing

As the process of creditor distributions unfolds, it seems that those who have received their funds are choosing to keep them rather than sell. Insights from CryptoQuant suggest a substantial increase in Bitcoin withdrawals from Kraken following the payouts to Mt. Gox claimants. This trend is indicative of users transferring their cryptocurrencies to cold wallets, signaling their intention to hold onto their assets.

Ki Young Ju, the founder and CEO of CryptoQuant, pointed out that following Kraken’s payouts from the Mt. Gox BTC stash, there wasn’t a significant increase in spot trading volumes or Bitcoin outflows. Additionally, there was no noticeable surge in exchange volume; inflows and outflows have remained standard since then. Ju emphasized that the Bitcoin held by Kraken from the Mt. Gox hack should be considered part of the current retail supply due to its sensitivity to market moods.

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2024-07-26 18:58