The Mt. Gox's trustee's intention is misread by the market

On 7 March 2018, Bloomberg reported that the trustee of now-defunct Mt. Gox offloaded about $400M of Bitcoin and Bitcoin Cash since late September 2017 (https://www.bloomberg.com/news/articles/2018-03-07/bitcoin-s-tokyo-whale-sold-400-million-and-he-s-not-done-yet).

The report sent a shock to the crypto market and prices of many cryptos collapsed soon after the release of the news.

However, it is important to point out that the fear is unjustified at least in the short term.

1. Although the trustee does not make it clear on the ways that he tried to liquidate his position, his position is such a large one that it is unwise to execute them on a public market, e.g. on a crypto exchange. It is more likely that he tried to offload the cryptos in a private market through some over-the-counter platforms or through private negotiation with other whales or professional investors. The downside pressure is not in the public market.

2. The trustee is not in a position to push through the liquidation of the trust's position in bitcoins and other cryptos on a continuous basis to the extent that it leads to a complete market crash. It is simply not in the interest of the trust and the trustee to do so - The trustee himself will be sued by the beneficiaries of the trust for negligence if they find that the sale of Mt. Gox's cryptos does not return the cash that they are looking after in a complete market crash that is thought to be kickoffed by the trustee himself.

Above all, the fact that the trustee tells the media that he may offload some more cryptos implies that he will not do so in the immediate future (and CANNOT do so if he does not want to get into trouble with angry beneficiaries) - Revealing his intention to the public will surely depress the price of cryptos but, in his own words, he tries to sell at “as high a price as possible.”. Obviously, he is not getting the highest price now.

Revealing your intention to sell is the last thing a trader wants to do.

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