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For years, the specter of Mt. Gox, a defunct Bitcoin exchange responsible for the loss of hundreds of thousands of bitcoins in 2014, has loomed over the cryptocurrency market. Concerns, often referred to as “FUD” (fear, uncertainty, and doubt), centered on the potential for these recovered coins to be dumped on the market, causing a price crash. However, recent events suggest the market might be finally shrugging off this fear.
On July 30th, Mt. Gox transferred a staggering 47,229 bitcoins (worth roughly $3 billion) to unknown wallets. Despite the hefty sum, the price of Bitcoin barely flinched, remaining above $66,000 with only a brief dip.
Crypto commentators see this muted reaction as a sign that the market has matured and factored in the eventual return of Mt. Gox coins.
“These Mt. Gox holders are likely OG Bitcoiners,” explains Ben Simpson, founder of Collective Shift, referring to the early adopters who bought Bitcoin years ago. “They believe in the industry and the asset, so they’re more likely to hold (HODL) than sell,” Simpson adds.
This sentiment aligns with the observation of pseudonymous crypto trader “exitpump,” who jokingly remarked, “These Mt. Gox moves became so usual that the market doesn’t give a flying fuck lmao.”
While some analysts, like Swyftx’s Pav Hundal, believe the coming weeks will be interesting, the initial market reaction is a positive sign. Furthermore, data suggests only a small portion of creditors opted for fiat (cash) when receiving their Bitcoin. This, coupled with the belief that these early adopters are long-term holders, indicates a limited sell-off threat.
“The market has already priced in the return of these coins,” says Simpson. He emphasizes the difference between Mt. Gox and situations like the German government selling its Bitcoin – “They needed cash, not Bitcoin.”
While Mt. Gox remains a cautionary tale in crypto history, its future coin movements seem less likely to trigger market panic. The maturing market appears to have factored in this long-standing uncertainty, paving the way for a more stable response to future Mt. Gox activity.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
I’m your translator between the financial Old World and the new frontier of crypto. After a career demystifying economics and markets, I enjoy elucidating crypto – from investment risks to earth-shaking potential. Let’s explore!
