There was an abnormal change in the Mentougou address early this morning, and then Mentougou began to transfer BTC to a new address. The transfer process briefly caused market panic, and BTC fell 4 points. The following is the new address of the transfer, and everyone can take a look.
After this transfer, only 0.12 BTC remained in the original address, and 141,686 BTC were transferred to the new address. It looks more like a wallet change, and not a market crash as the market understands.
Let’s review the Mentougou incident:
In 2014, the world's largest cryptocurrency exchange, MT.Gox, went bankrupt after 850,000 bitcoins were stolen.
In 2014, the world's largest exchange, which once accounted for 70% of BTC trading volume, was hacked and 850,000 BTC were stolen (200,000 BTC were later recovered and 60,000 were sold successively)
On the day the crisis broke out, the price of Bitcoin plummeted by 25%, from $535 to $400
Six large institutions including BTC China, Coinbase, and Bitstamp urgently issued a joint statement to distance themselves from Mentougou.
In the same year, CZ sold his house in Shanghai and bought all his Bitcoin for $600. In less than a year, the housing prices in Shanghai doubled, and the price of Bitcoin fell by nearly 70%.
What is the purpose of Mentougou transferring BTC?
Well, let's get back to the point. What do you think of the unusual movement in Mentougou today? Will it lead to a panic sell-off in the market?
We can make a comparison with the recent Grayscale. Grayscale’s highest BTC holdings reached 655,800 around February 26, 2021.
However, the digital assets managed by Grayscale Trust previously had no redemption mechanism. With the approval of BTC ETF, this situation has changed. From January 13, 2024 to the present, Grayscale has sold more than 330,000 BTC to the market in batches, and the remaining 289,000 BTC are in the wallet.
When the market just released this news, it only suffered a short-term decline, and then the ETFs of institutions offset it and formed a positive inflow that was absorbed by the market. As of now, the BTC held by institutions has reached an astonishing 1,029,964 pieces, worth more than 70 billion US dollars.
Compared with Grayscale's 600,000 BTC, Mt. Gox is nothing. So the conclusion is obvious. The release of BTC from Mt. Gox will at most cause short-term turbulence in the market, but will not affect the market in the long run. After all, the current market liquidity is completely incomparable to that of the past. OK, now let's summarize the conclusion.
1. The tokens of Mentougou will not be dumped into the market all at once. Large-scale BTC sales are basically carried out in batches through over-the-counter transactions, which has limited impact on the BTC price on the market.
Second, some bonds may have been transferred to institutions at a discount. There are two compensation plans: basic compensation and proportional compensation. Mt.Gox's largest creditors, Bitcoinica and MGIF, chose a one-time payment plan and chose to obtain their bankruptcy recovery mainly in the form of Bitcoin rather than legal currency. This also greatly reduced the market's concerns about Mt.Gox selling a large amount of Bitcoin to pay legal currency compensation. The claims required by these two major creditors accounted for about one-fifth of the total
3. This matter is brought up every year and is basically used by capital to incite the market. It can only cause short-term turbulence at most and will not have much impact on the long-term market.
4. The impact of this incident on BCH may be greater. People are more willing to hold BTC and sell BCH. Brad Mills conducted a MT.GOX creditor opinion survey on November 14, 2021. Mt.GOX creditors plan to keep the BTC they received as compensation, and up to 54% of the people plan to sell the BCH they received as compensation. Up to 68% of the people plan to sell the BCH they received as compensation.
5. From another perspective, it will not lead to a decline in the market, but will be bullish. Most of the Bitcoin will return to institutions and large investors, and institutions at this price have no interest in selling. On the contrary, the compensation unlocking will give large institutions and large investors more motivation to promote the bull market.
