Why Bitcoin Flows to Exchanges Hit Annual Highs: ITB

Since the beginning of the month, the flow of bitcoin (BTC) to crypto exchanges is increasing. This is mainly due to the shutdown of the BTC trading platform Mt. Gox Recovery Trustee.

Data from blockchain analytic platform IntoTheBlock On July 25, the exchange's BTC net flows rose to $2.8 billion per year. Crypto exchanges saw similar BTC inflows in mid-March, two months after the US Bitcoin Exchange Traded Fund (ETF) market went live.

Mt. Gox Deposit Drive Exchange Flows

The Mt. Gox trustee has transferred thousands of bitcoins to crypto exchanges Kraken and Bitstamp in the past two weeks. Kraken has acquired $3.1 billion worth of digital currency and has completed distribution to users, according to Mt. Gox lenders and victims of the exchange's 2014 multimillion-dollar hack.

Bitstamp said it received its share of the payout and began distributing it on July 25. The exchange said payments to user wallets take up to a week to go through security checks to avoid compromise. While the exact amount of assets received by Bitstamp is unclear, data from chain analysts suggests it could be over $1 billion.

In addition to the transfers to Kraken and Bitstamp, the Mt. Gox trustee has been moving large amounts to undisclosed addresses, possibly in preparation for distribution to other exchanges involved in the lender's redemption plan. CryptoPotato reported on July 24 that $2.47 billion worth of BTC had been transferred to an anonymous wallet from an address associated with the defunct entity.

The Mt. Gox users are HODLing.

It appears that as the lender's distribution has progressed, consumers who have received their money have chosen to hold on to it and not sell it. CryptoQuant data from Mt. Gox has seen a sharp increase in BTC withdrawals from Kraken since users started accepting BTC, signaling a move to cold wallets and preparations to hold their assets.

CryptoQuant founder and CEO Ki Young Joo did not report any significant changes in the spot's trading volume or BTC flow after Kraken completed its payout. Also, there is no increase in volume on the exchange; Since then, the check-in and check-out have been regular. The Kraken's Mt. Gox BTC supply should be viewed as part of the current retail supply as it is now subject to market sentiment.