After more than a decade of legal proceedings, the long-awaited distribution of Bitcoin recovered from the Mt.Gox exchange collapse is finally underway. According to the latest report from Glassnode, the total recovered coin volume was over 141,686 BTC, with just under 59,000 BTC now redistributed to creditors and another 79,600 BTC soon to follow.
Kraken and Bitstamp have been designated as the exchanges responsible for redistributing these funds. Kraken has received 49,000 BTC, and Bitstamp has received the first tranche of 10,000 BTC.
Details of the Bitcoin Distribution
The scale of these distributions is already larger than other significant events, such as ETF inflows, issuance to miners, and sell-offs by the German Government. However, the long history of creditors trying to recover their coins paints a picture of their likely behavior moving forward. Many creditors opted to receive BTC instead of fiat, a new approach in Japanese bankruptcy law, suggesting they might be long-term holders.
The sell-side pressure from the German Government in late June was significant, with over 48,000 BTC sold within a month. Despite this, the market absorbed the supply and managed to rally from $53,000 to over $68,000. Throughout the Mt.Gox distribution, the Bitcoin price has remained between $66,000 and $68,000, indicating a lighter-than-expected sell-side pressure and resilient demand.
This behavior aligns with the broader market trend. Bitcoin bull markets naturally attract sell-side pressure as higher prices incentivize long-term holders to take profits. However, the recent data shows a gradual return to a HODLing dominant behavior, with long-term investors holding onto their coins. The proportion of wealth held by new investors is declining, indicating a shift back towards long-term holding and a slowdown in new demand since the $73,000 all-time high.
Long-term holders currently possess 45% of the network’s wealth, a relatively high figure compared to past market cycles. This underscores the strong HODL mentality among these investors, who seem to be waiting for even higher prices before selling.
As the supply of long-term holders increases and the supply of short-term holders declines, the Bitcoin market appears to be in a phase dominated by high-conviction investors committed to holding their assets for the foreseeable future.
Related Reading | Bitcoin in Reserves? Hong Kong Lawmaker Sparks Bold Debate
