Mt. Gox and US Government Could Flood Market with $14 Billion in Bitcoin Selling Pressure

Bitcoin may face additional downward pressure as nearly $15 billion worth of Bitcoin from Mt. Gox and the US government could soon enter the market. This influx could potentially affect Bitcoin's sluggish momentum, carrying over into September.

US Government and Mt. Gox Set for Major Bitcoin Distributions, Totaling Over $14 Billion

• US Government Holdings: The US government currently holds over 203,000 Bitcoin, valued at approximately $12.1 billion.

• Mt. Gox Distribution: The defunct crypto exchange Mt. Gox is set to distribute around 46,000 Bitcoin, worth over $2.7 billion, by the end of 2024.

Bitcoin selling pressure. Source: Kaiko

Read more: Final Batch of Mt. Gox Payouts Set to Commence via Bitstamp

Kraken's Liquidity Expected to Absorb Impact of Mt. Gox Bitcoin Distributions, Reports Kaiko

According to an August 29 report by Kaiko, the impact of these distributions might be mitigated:

“Kraken has managed Bitcoin ETF flows with only minor slippage at market close. Its liquidity profile suggests that the Mt. Gox repayments are unlikely to cause significant structural issues in the broader market.”

Despite the anticipated distribution, Kaiko suggests that Kraken’s liquidity should absorb the impact without major disruptions.

Mt. Gox Creditors Opt to Hold Bitcoin Amidst $4 Billion Distribution, Impacting Market Volumes

Mt. Gox creditors have been waiting for their repayments for a decade. The recent distribution of nearly $4 billion worth of Bitcoin in July saw most creditors opt to hold rather than sell. This trend might continue, as:

“Creditors chose to receive Bitcoin instead of fiat, a change in Japanese bankruptcy law. Consequently, it is likely that only a fraction of these distributed coins will be sold on the market,” as noted in a Glassnode report from July 29.

BTC: Mt. Gox trustee outflows. Source: Glassnode

The spot cumulative volume delta (CVD), which measures the net difference between buying and selling trade volumes on centralized exchanges, showed no significant increase on Kraken following the distribution.

Bitcoin CVD, Kraken exchange. Source: Glassnode

Read more: Mt. Gox Creditors Receive Long-Awaited Bitcoin Payouts，Bitcoin price has fallen in recent days

Bitcoin Struggles Below $60,000 Amid Seasonal Trends and Liquidity Challenges

Bitcoin’s price has remained below the psychological $60,000 mark, experiencing a 10.7% decline over the past month. To finish August positively, Bitcoin would need to close above $64,300.

BTC/USD, 1-day chart. Source: TradingView

Analysts from Bitfinex highlight that the lack of liquidity typical of summer may extend into September, making it challenging for Bitcoin to breach the $63,900 resistance level:

“Price reflects historical transactions. Bitcoin's recent rally reached the Short Term Holder (STH) realized price of around $63,900, leading to some profit-taking from this cohort.”

Additionally, Bitcoin has historically experienced negative returns in September, averaging -4.78% since 2013.