Note that August was not the best for Bitcoin and the cryptocurrency market as a whole. Still, at the beginning of the month the industry faced a large-scale collapse, during which BTC fell to a local bottom at $49,000.

The result of August for the first cryptocurrency was a drawdown of 8.6 percent.

Results of Bitcoin BTC rate changes by month

At the same time, spot Bitcoin-ETFs in the U.S. recorded a net outflow of $83 million at the end of the month, which was the first negative after three consecutive months of growth.

Capital inflows and outflows from spot Bitcoin-ETFs in the US

What’s going to happen to Bitcoin?

The crypto market is currently facing a significant oversupply, with this being a hot topic for the crypto throughout the summer. Overall, from May to August, the forced sales and liquidation of bankrupt exchange Mt. Gox caused bearish pressure at various stages.

It is important to note that we are talking about an existing cryptocurrency that was previously held on individual wallets without being moved. Accordingly, Bitcoin's total supply remains the same and increases by the same 3.25 BTC per block.

A four-hour chart of the Bitcoin BTC rate on the Binance exchange

In a conversation with Decrypt reporters, Dragonfly general partner Rob Hadik said that during the summer, the price of BTC was under significant pressure from the distribution of Mt.Gox coins, the situation in the Japanese stock market, and simply a slowdown in demand.

Here is his rejoinder on the matter.

Market players remain concerned that the government’s crypto reserves and Mt.Gox’s rehabilitation plan could become a threat.


However, the initial operations to distribute crypto to former Mt.Gox users did not lead to an increase in cryptocurrency sales. With this in mind, experts concluded that such investors, because of their experience and long association with the world of coins, decided to use the strategy of hodl in relation to new coins. That is, users count on the continuation of the current bullrun and the corresponding market growth.


Amount of funds under management of the trustee of the bankrupt Mt.Gox exchange

As of today, Mt.Gox trustee Nobuaki Kobayashi’s team has 44,899 BTC, equivalent to $2.61 billion, to distribute to creditors via centralised exchanges. And the deadline for such transactions is 31 October 2024. After this date, the Mt.Gox story will be a thing of the past, and various transactions from the exchange’s wallets will no longer panic investors.

Fideum co-founder Darren Franceschini believes that almost all of those bitcoins, equivalent to $2.6 billion, could be sold by the recipients. This would potentially lead to a total upside of $8.2 billion to the offering from Mt.Gox alone.

As we have already noted, the first transactions of bitcoin distribution by the exchange did not lead to the activation of sellers, that is, the majority of holders of the crypto decided to keep it. Accordingly, there are no real reasons to talk about the prospect of draining the rest of the distributed coins now, well, and the expert's comments essentially only correspond to the negative sentiment in the market, which may lead to a more vivid reaction to his version.

Cryptocurrency market collapse

In the near future, other large holders may also put pressure on the market. For example, the US government owns more than $2 billion worth of BTC, Franceschini noted. He continues.

While there have been no official announcements about the sale of these bitcoins, the possibility of liquidation could put significant pressure on the market.


The prospect of selling all coins from the US government's cryptocurrency wallet also remains unclear, as some politicians are slowly coming around to supporting the idea of a national reserve of digital assets. For example, Senator Cynthia Lummis has previously proposed buying one million BTC on behalf of the US government.

The coins should be stored without moving for twenty years. The only exception would be the sale of cryptocurrency for the sake of repaying the national debt.


The volume of funds on crypto wallets of the US government

The potential for recovery of the digital asset market is still there. The previously mentioned Dragonfly representative Rob Hadik puts his hope in the upcoming US presidential election.

The election itself could be a catalyst for a more favourable regulatory environment and greater clarity, leading to increased interest from institutional buyers.

Indeed, Donald Trump has previously promised to work towards creating an adequate modern framework for the regulation of cryptocurrencies in the country if he wins. In this way, the US will be able to attract new developers of blockchain projects rather than scaring them away due to the unpredictable behaviour of SEC Chairman Gary Gensler.

SEC Chairman Gary Gensler

Kaiko’s report emphasises the importance of looking beyond trading volumes when assessing market liquidity. One should also look at market depth, which measures the market’s ability to absorb large orders without significantly affecting the price.

In addition, the ratio of volume, liquidity and price slippage are important as key indicators of market health and efficiency.

Generally, no one likes it when large crypto holders sell large inventories of coins quickly, because it leads to a collapse in their value. For example, the day before, the creator of Etherium Vitalik Buterin received criticism from some commentators on Twitter.

The reason for indignation was the information that allegedly from his wallet was sent 800 ETH in eqivalent of $2.01 million to be exchanged for USDC steiblcoin, Cointelegraph reports.

Efirium creator Vitalik Buterin’s transactions

According to the Lookonchain platform, Vitalik made another transaction of more than $3 million in Etherium on 9 August. Here is the corresponding screenshot.

Transactions of Vitalik Buterin, the creator of Etherium

Now Buterin has also posted on Twitter a rebuttal to the rumours. Here is his quote on the matter.

Since 2018, I haven’t sold any assets or kept the proceeds. All sales have been to support meaningful projects – whether in the Efirium ecosystem or for broader philanthropic purposes like biomedical research and development.

Community reaction to Vitalik’s public response was positive. Many noted that Buterin deserved any reward because of his merits, and selling some of the coins is not considered something shameful.

Vitalik Buterin, the creator of Efirium

In general, even in the above-mentioned transactions, the volume of funds is not so large to seriously affect the market, and therefore such talk is not worth anything at all.


Experts' comments on the future of Bitcoin and the coin market as a whole are in line with the current negative sentiment in the industry. However, the industry has been falling for several months now, and there is no reason to change the situation on the horizon. It is not excluded that it will start to change after the long-awaited reduction of the base interest rate by the US Federal Reserve representatives as early as 18 September.