Since the beginning of the month, bitcoin (BTC) flows into crypto exchanges have been on the rise. This is primarily due to creditor distributions by the rehabilitation trustee of the defunct BTC trading platform Mt. Gox.
Data from blockchain analytic platform IntoTheBlock has revealed that July 25 saw the exchange BTC net flows hit a yearly high of $2.8 billion. Crypto trading platforms saw similar BTC inflows in mid-March, about two months after the United States spot Bitcoin exchange-traded fund (ETF) market went live.
Mt. Gox Deposits Drive Exchange Flows
The Mt. Gox trustee has transferred thousands of bitcoins to crypto exchanges Kraken and Bitstamp in the last two weeks. Kraken received $3.1 billion worth of the leading digital currency and has concluded distributions to users that double as Mt. Gox creditors and victims of the exchange’s 2014 multi-million dollar hack.
Bitstamp has also received its portion of the repayment funds and began distributions on July 25. The exchange said payouts to user wallets would take up to a week amid security checks to avoid compromises. While the exact amount of assets Bitstamp received remains unclear, data from on-chain analysts suggest it may be upwards of $1 billion.
Apart from the transfers to Kraken and Bitstamp, the Mt. Gox trustee has also been moving large amounts to unknown addresses, most likely in preparation for distribution to other exchanges involved in its creditor redemption plan. CryptoPotato reported on July 24 that the address linked to the defunct entity moved $2.47 billion BTC to an unknown wallet.
Mt. Gox Users Are HODLing
As creditor distributions progress, it appears that users who have received their funds are opting to hold and not sell. CryptoQuant data revealed a significant rise in BTC withdrawals from Kraken after Mt. Gox users started receiving their BTC, indicating movement to cold wallets and a sign of preparation to hold their assets.
CryptoQuant founder and CEO Ki Young Ju noted no substantial uptick in spot trading volumes or BTC outflows within days after Kraken concluded the payouts. Also, there has been no volume surge on the exchange; inflows and outflows have remained normal since then. He insisted that the Mt. Gox BTC supply in Kraken should be treated as part of the existing retail supply because it is now sensitive to market sentiment.
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