LUCKNOW (CoinChapter.com) — Beneficiaries of the defunct Mt. Gox cryptocurrency exchanges are holding onto their newly received Bitcoin and Bitcoin Cash, defying market expectations of a massive sell-off. Mt. Gox lost 850,000 BTC in 2014 and has finally begun repaying its creditors. The exchange’s rehabilitation trustee announced in June that repayments would start in July 2024. Approximately 127,000 creditors have been waiting over a decade to recover their funds.
Investors Choose Self-Custody Over Selling — Bullish Sentiment Emerging?
Contrary to expectations, the data reveals a significant decline in Bitcoin exchange reserves since early 2024. This trend accelerated sharply in July, coinciding with the start of Mt. Gox repayments. Exchange reserves plummeted from around 3.05 million BTC in January to approximately 2.7 million BTC by late July.
This sharp decline in exchange reserves indicates that investors, including Mt. Gox beneficiaries are actively withdrawing Bitcoin from exchanges. Instead of selling, they’re moving their assets to personal wallets. This strongly suggests a preference for holding Bitcoin long-term rather than immediate liquidation.
The mass exodus of Bitcoin from exchanges typically signals bullish sentiment among investors. By choosing self-custody, Mt. Gox creditors and other Bitcoin holders show confidence in the cryptocurrency’s future value.
Despite fears of a massive sell-off, Bitcoin’s price has shown resilience. The price dipped from $62,300 to around $60,300 following the repayment announcements – a relatively modest 5% decrease. This stability further reinforces the notion that large-scale liquidation isn’t occurring.
At the time of this writing, Bitcoin is trading at $66,224, down 0-5% from a day ago.
Mt. Gox’s fell from grace in 2014. Once handling over 70% of all Bitcoin trades, the exchange’s security breach led to a loss of 850,000 BTC, worth $51.9 billion at current prices. The collapse tanked Bitcoin’s price to below $500, showing the market’s vulnerability at the time.
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