The Mt. Gox $8B Bitcoin Dump Scare is Real AF Read CoinChapter.com on Google News
NAIROBI (CoinChapter.com)— The collapsed Japanese crypto exchange Mt. Gox has transferred nearly 47,230 BTC , valued at $2.71 billion, to a new wallet address.
The transaction marks its first major transaction since May. Blockchain analytics platform Arkham Intelligence reported the transfer occurred at 12:30 am UTC on July 5, moving the Bitcoin from “cold storage.”
Source: Arkham Intelligence
In May, Mt. Gox transferred nearly $7.3 billion worth of Bitcoin to another unknown wallet, causing Bitcoin’s price to dip by 2%. Over the past week, Bitcoin has dropped by 10.62%, further fueling concerns about market stability.
The recent transfer aligns with the exchange’s scheduled plan to repay creditors in July. A total of $8.5 billion in Bitcoin is set for repayment, raising concerns among market participants. The fear is that a massive sell-off could follow, potentially flooding the market with Bitcoin that has been inaccessible for over a decade.
Mt. Gox Begins Repayments in Bitcoin and Bitcoin Cash
Mt. Gox has started repaying its debts in Bitcoin and Bitcoin Cash through designated crypto exchanges. On July 5, it moved 1,545 BTC to Bitbank. Trustee Nobuaki Kobayashi stated on June 24 that they completed all necessary steps for repayments.
The trustees have completed all necessary steps for repayments. Source: Nobuaki Kobayashi
According to MtGoxBalanceBot on X, the total Bitcoin balance across all known addresses controlled by the Mt. Gox Trustee is currently 94,457 BTC. Since repayments started, 47,288 BTC have been moved from these addresses.
Creditors might not receive their Bitcoin immediately. A trustee document states that the timeline for payouts to become visible in creditors’ accounts may vary depending on the exchanges. Kraken has 90 days to process payouts, while Bitstamp may take up to 60 days.
BitGo will have payouts visible within 20 days. SBI VC Trade and Bitbank will both complete payouts within 14 days.
Market Concerns and Analyst Insights
On July 5, Bitcoin’s value plummeted below $54,000. However, at the time of writing, there are signs of recovery, with the cryptocurrency surpassing the $56,000 mark.
BTC/USD 1-day price chart. Source: CoinMarketCap
Alex Thorn, head of research at Galaxy Digital, indicated that many Mt. Gox Bitcoin holders might exhibit “diamond hands,” holding onto their assets despite the opportunity to sell. He also noted the potential adverse impact of capital gains taxes on those selling large amounts of Bitcoin at once.
Analysts expressed concern over the market impact. Source: Karan Singh Arora
Karan Singh Arora, an independent crypto analyst, expressed concern over the market impact. He noted that Mt. Gox’s recent transfer of 48K BTC caused Bitcoin’s price to drop to $53,000.
Furthermore, Arora noted that with more than $8 billion in BTC yet to be sold, Bitcoin prices could see a significant decline. Hack victims have waited over a decade for their funds, which have increased in value by over 10,000%.
He added that a repayment of less than 10% already caused a significant decline, and the remaining tokens could potentially drive Bitcoin’s price down to $20,000.
Mt. Gox isn’t an isolated incident. Recently, crypto exchange Gemini returned over $2 billion worth of Bitcoin to users, leading to a 230% recovery in value since suspending withdrawals in November.
Despite the dire warnings, Arora assured that Bitcoin has enough liquidity to absorb the sales over a few months if not released all at once.
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