TLDR
- Mt. Gox trustee moved $2.8-3 billion worth of Bitcoin to a cold wallet.
- This movement caused a short-term dip in Bitcoin’s price from $65,000 to around $63,000.
- Mt. Gox still holds about $9 billion worth of Bitcoin to be distributed to creditors.
- The trustee confirmed that Bitcoin repayments would begin in July 2024.
- Analysts believe the market can absorb the potential selling pressure from Mt. Gox creditors.
On Tuesday, July 16, 2024, the cryptocurrency world saw significant activity from Mt. Gox, a defunct Bitcoin exchange that has been in the process of repaying its creditors for years.
The Mt. Gox trustee moved a large amount of Bitcoin, worth between $2.8 and $3 billion, to one of its cold storage wallets. This move caused a ripple effect in the crypto market, with Bitcoin’s price experiencing a short-term dip.
Mt. Gox was once the world’s largest Bitcoin exchange, handling about 70% of all Bitcoin trades in 2013. However, the exchange went bankrupt in 2014 after losing 850,000 Bitcoins to hackers. Since then, the company has been working on a plan to repay its creditors.
The recent transfer of funds appears to be part of the preparation for the long-awaited repayment process.
According to blockchain analytics platform Arkham Intelligence, the Mt. Gox cold wallet now holds about $3 billion of the nearly $9 billion total Bitcoin that’s due to be transferred to creditors.
This move comes after the trustee confirmed last month that Bitcoin repayments would begin in July 2024.
The market reacted quickly to this large movement of funds. Bitcoin’s price, which had reached $65,000 earlier in the day, fell to around $63,000 within an hour of the transfer.
This represents a 1.4% drop in a short period. However, despite this dip, Bitcoin is still trading 10% higher than it was a week ago.
The repayment process isn’t being handled solely by the Mt. Gox trustee. Bitstamp, one of five crypto exchanges being used to distribute Bitcoin to creditors, announced last week that they would begin distributions “as soon as possible.”
The exchange has a 60-day window to distribute the tokens, but they’re working to complete the process as quickly as they can.
While some market participants are concerned about potential selling pressure from Mt. Gox creditors receiving their Bitcoin after a decade-long wait, many analysts believe the market is well-positioned to absorb this pressure.
Lennix Lai, the Global Chief Commercial Officer at OKX, told Decrypt that the pressure from Mt. Gox has been “vastly overestimated.” He pointed out that many creditors are long-term Bitcoin enthusiasts who are less likely to sell all their Bitcoins immediately.
It’s worth noting that this isn’t the only large-scale Bitcoin movement affecting the market. The German government has been conducting a weeks-long selling spree of seized Bitcoin, which some analysts believe may have a more significant impact on the market than the Mt. Gox repayments.
As of the latest reports, Mt. Gox still holds about 138,985 Bitcoin in its main wallet, worth around $8.75 billion. The trustee’s recent actions suggest that the distribution of these funds to creditors may be imminent.
This development marks a potential end to one of the longest-running sagas in the cryptocurrency world. After years of waiting, Mt. Gox creditors may finally receive their long-overdue compensation. However, the full impact of these repayments on the broader crypto market remains to be seen.
