After topping $70,000 on Monday, Bitcoin swiftly slumped to sub-$68K on Tuesday after wallets labeled as belonging to the long-defunct crypto exchange Mt. Gox transferred Bitcoin worth over $9 billion to an unknown wallet.
The move is ahead of the defunct crypto exchange’s plan to return BTC holdings to creditors before October 31, 2024.
Bitcoin Repayments To Mt. Gox Creditors Nearing Reality
After 10 years of holding the bag, creditors of the famed, failed Bitcoin exchange, Mt. Gox, may soon get at least some of their money back. While that might sound like good news, some are worried about the possibility of Mt. Gox customers dumping their newly recovered BTC, putting bearish pressure on the foremost cryptocurrency.
Data from Arkham Intelligence shows that Mt. Gox transferred over 140,000 BTC, worth around $9.365 billion, from its cold wallets. Wallet activity indicates the transfers were conducted over thirteen different transactions. Mt. Gox trustee firm Nagashima Ohno and Tsunematsu started with a test transaction worth $3 on May 20 and another smaller transaction of $160 earlier today. The rest of the transactions ranged from $1.2 million to $2.2 billion worth of BTC.
All of Mt.Gox’s Bitcoin holdings have now effectively been transferred to a single wallet address “1JbezDVd9VsK9o1Ga9UqLydeuEvhKLAPs6”. This movement marks the first time in five years that Mt. Gox transferred assets from its wallet.
Based in Japan, Mt. Gox was one of the oldest and most prominent crypto exchanges, once handling at least 70% of all Bitcoin trades. However, a major security hack in 2011 dealt its reputation a fatal blow. The exchange eventually imploded in 2014 amidst claims of insolvency, resulting in the loss of over 800,000 BTC.
Since then, it has been a harrowing struggle for Mt. Gox creditors, who have faced rehabilitation plan delays and huge fees in a lengthy fight to recover the lost funds.
What’s Next For BTC?
At the time of writing, the Bitcoin price has rebounded to $68,321 after sliding to as low as $67,555.01 early this morning. The drop is a swift pullback for BTC. Only just yesterday the premier crypto leaped past the $70,000 threshold after it was revealed Argentina authorities have been meeting with officials from El Salvador to discuss the prospect of embracing Bitcoin as legal tender.
However, investors usually get alarmed when there’s movement from the Mt. Gox wallets, which sparks fears that an enormous amount of BTC is about to be dumped on the market and puts negative price pressure on Bitcoin.
However, Galaxy’s head of research, Alex Thorn, stated in a May 28 post on X that he expected the majority of the moved BTC to be HODL’d by creditors, instead of being sold on the open market.
It remains to be seen whether the release of Bitcoin to creditors will result in heavy selling pressure.
