Bitcoin’s Net Flow to Exchanges Hits Annual Peak
Recently, there has been a significant increase in the flow of bitcoin (BTC) into cryptocurrency exchanges. This surge is largely attributed to the distribution of funds by the rehabilitation trustee of the now-defunct BTC trading platform Mt. Gox.
According to data from blockchain analytics platform IntoTheBlock, on July 25, the net flow of BTC into exchanges reached a yearly high of $2.8 billion. A similar influx of BTC was observed on crypto trading platforms in mid-March, following the launch of the United States spot Bitcoin exchange-traded fund (ETF) market.
The trustee of Mt. Gox has been transferring thousands of bitcoins to crypto exchanges Kraken and Bitstamp over the past two weeks. Kraken received $3.1 billion worth of BTC and has completed distributions to users who are both Mt. Gox creditors and victims of the exchange’s 2014 hack. Similarly, Bitstamp has also received its share of the repayment funds and began distributions on July 25. The exchange mentioned that payouts to user wallets would undergo security checks to prevent any compromises. While the exact amount received by Bitstamp is not disclosed, data from on-chain analysts suggest it could be over $1 billion.
In addition to transfers to Kraken and Bitstamp, the Mt. Gox trustee has been moving substantial amounts to unknown addresses, presumably in preparation for distribution to other exchanges involved in the creditor redemption plan. On July 24, CryptoPotato reported that an address linked to Mt. Gox transferred $2.47 billion worth of BTC to an unknown wallet.
As the creditor distributions continue, it seems that users who have received their funds are choosing to hold onto their bitcoins instead of selling them. Data from CryptoQuant indicates a notable increase in BTC withdrawals from Kraken after Mt. Gox users began receiving their funds. This suggests that users are moving their assets to cold wallets, signaling their intention to hold onto their bitcoins.
CryptoQuant’s founder and CEO, Ki Young Ju, pointed out that there has not been a significant increase in spot trading volumes or BTC outflows following Kraken’s payouts. The exchange has not experienced a surge in trading activity, and inflows and outflows have remained stable. He emphasized that the BTC supply from Mt. Gox on Kraken should be considered part of the existing retail supply, as it is now influenced by market sentiment.
Overall, the recent spike in BTC flows to exchanges, driven by Mt. Gox trustee distributions, underscores the ongoing impact of past events on the cryptocurrency market. As users continue to receive their funds, their decision to hold onto their bitcoins may have implications for market dynamics in the coming weeks.