Any additional selling pressure from the Mt. Gox repayments of the remaining 47,170 BTC ($2.7 bln) is unlikely to cause crypto asset liquidity problems, according to Kaiko. What is the impact of the Mt.Gox factor on cryptocurrency liquidity? And how objective is Kaiko's assessment?
The impact of Mt. Gox’s BTC distribution on crypto market liquidity is likely to be less significant than it might seem at first glance. Kaiko’s analysis, based on Kraken’s ability to handle bitcoin ETF flows, suggests sufficient liquidity to absorb the additional selling pressure.
Notably, by all accounts the market has already absorbed a larger amount. The previous distribution in July did not trigger a flash crash. It’s important to consider that the crypto market has grown significantly since the collapse of Mt. Goxin 2014. The amount in question, $2.7 bln, while significant, represents a smaller portion of the overall market than before. Additionally, a gradual distribution until end-2024 may help mitigate potential market impact.
Kaiko's assessment makes sense given the available market data and Kraken's liquidity profile. However, it should be noted that there may be unforeseen factors that could impact market dynamics.