Glassnode: Mt.Gox creditors are long-term holders and will not sell BTC after compensation is paid

What’s new? In July, the Mt.Gox bitcoin exchange began distributing cryptocurrency to customers through third-party platforms ten years after its bankruptcy. Currently, lenders have received approximately 59 000 BTC through the Kraken and Bitstamp exchanges, with another 79 600 coins to come. However, Glassnode experts note that many Mt.Gox customers are long-term holders and do not intend to immediately sell the received assets.

Glassnode’s report

What else is known? In addition to Mt.Gox, a number of other bankrupt companies, have been distributing funds to creditors over the past two months. The total amount paid out is significantly higher than the inflows into spot crypto exchange-traded funds (ETFs) and the volume of BTC mining by miners.

Despite this, the asset price has continued to fluctuate between $68 000 and $66 000 since Mt.Gox began paying out, which may indicate lower-than-expected sales and/or relatively steady demand.

The CVD metric on the Kraken and Bitstamp exchanges also supports this assumption. CVD measures the net difference between spot buy and sell transaction volumes on centralized exchanges (CEXs).

Kraken had a slight spike in selling pressure immediately after distribution, but even that remained within typical daily values. Bitstamp has a similar situation: with a slight bias towards the prevalence of sales.

Glassnode experts believe this confirms their thesis that Mt.Gox lenders should be considered as long-term holders, despite the significant incentive to lock in profits, as the BTC exchange rate has grown tenfold in the meantime.

The company noted a decline in the share of coins owned by new investors: the figure is well below the levels usually seen at market peaks. According to analysts, this indicates a return of investors to tactics to hold BTC, but also a general slowdown in demand growth after reaching a record price of $73 500 per coin in March this year.

“If we inspect the cohort who have held their coins for 3- and 6-months, we can see a significant growth in their relative network wealth. This again suggests a general trend of investors active earlier in the year holding their coins dormant and maturing into increasingly senior age bands. From this, we deduce that HOLDing is likely the dominant mechanic within the Short-Term Holder cohort,” Glassnode said.

As for long-term investors, they currently hold 45% of assets, which is very high compared to the peak of the cycle. This emphasizes that long-term holders are patiently waiting for prices to rise to take advantage of the market.

When comparing the balances of long-term (LTH) and short-term holders (STH), there is a discrepancy: the share of supply of the asset in the hands of LTH is growing, while at STH it is falling.

To the new coins, analysts include those purchased at the end of February at a price of about $51 000. However, it won’t be long before many of the coins purchased in the wave of hype surrounding spot ETFs begin to move into LTH status, and the divergence will only intensify.

“The distribution pressure by the LTH cohort remains relatively light and is declining. This provides further confluence behind our general thesis that the Bitcoin supply remains dominated mainly by longer-term, high-conviction investors. HODLing remains the preferred strategy for the time being,” the company noted.

Thus, the balance sheet of long-term holders continues to grow, while their share of the network’s assets remains significantly high compared to previous macroeconomic events. This suggests that LTHs are holding coins and waiting for prices to rise to lock in profits.