The value of Bitcoin [BTC] has dropped significantly by 1.30% following a surge in activity at defunct cryptocurrency exchange Mt. Gox. Arkham Intelligence reports that Mt. Gox moved more than $2.9 billion worth of BTC from its cold wallets to an unknown address. The transfer marks the first asset transfer from Mt. Gox in five years.
According to the network, Mt. Gox moved a total of 42,830 BTC through multiple transactions. These transactions mainly occurred between 1:41 am and 2:54 am UTC, involving 21 transfers, most of which were 2,000 BTC each. In addition, a large transfer of 32,137 BTC occurred at 4:11 am UTC, all transferred to an unmarked address.
This sudden movement of assets has sparked interest in the cryptocurrency community, especially since Mt. Gox still holds approximately 138,000 BTC in its identified wallets, valued at over $9.36 billion.
Market Reaction
The Bitcoin market reacted quickly, with the cryptocurrency's price falling by about 1.30% to $67,875 from $69.374 at the time of the initial transfer. The drop comes as Bitcoin has struggled to break through the $70,000 resistance level despite multiple bullish attempts. The price of the king's coin has been consolidating in the $65,000-70,000 range for some time. The market's reaction to the large BTC transfer from Mt. Gox highlights Bitcoin's price sensitivity to large movements in dormant assets, especially high-profit wallets.
look back
Mt. Gox was once the world's largest Bitcoin exchange, but collapsed in 20214 after a massive hacker attack resulted in the loss of 850,000 BTC. Since then, the exchange has been embroiled in legal disputes and repayment plans for affected users. In September 2023, the trustee of Mt. Gox announced that the repayment period would be extended by 12 months, currently scheduled for October 31, 2024.
The recent movement has sparked speculation about the motives behind the transfer. Custodian Nagashima Ohno and Tsunematsu has not yet commented on the destination of the transferred bitcoins or how they were purchased.
Analyst warnings and market sentiment
K33 Research analysts warned last month that the movement of Bitcoin during the Mt. Gox incident could spook the market and weigh on the price of the largest cryptocurrency. The negative market reaction to the sudden transfers appears to confirm the analysts’ predictions.
Mt. Gox owes more than $9.4 billion in BTC to some of its 127,000 creditors, who have been waiting for more than a decade to get their funds back since the exchange collapsed following multiple undetected hacks. The final repayment date is set for October 31, 2024, and the trustee began contacting creditors in January to verify their identities and exchange accounts for repayment.
Such a large amount of Bitcoin flowing out of the Mt. Gox wallet address is seen as a significant event in the cryptocurrency market. It highlights the ongoing complexity and impact of the long-running Mt. Gox fiasco. As the final repayment date approaches, more market volatility can be expected, especially if more large transfers occur.
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