The world’s largest cryptocurrency, Bitcoin (BTC), faced renewed sell-side pressure on July 16 after blockchain data showed $2.8 billion in BTC belonging to Mt. Gox’s rehabilitation program was shifted between wallets.
The price of Bitcoin shed 3% of its value after surpassing the $65,000 level earlier today. Investors on edge about this gargantuan windfall worry that a potential sell-off by creditors may flood the market and push prices lower.
Investors Remain Jittery About Mt. Gox Repayments
A cold wallet linked to the now-defunct exchange Mt. Gox sent over 47,000 Bitcoin (BTC), valued at almost $3 billion, to one of its internal cold wallets Tuesday morning. Data indicates that Mt. Gox’s wallet made a 0.021 BTC test transaction before moving the $2.8 billion worth of BTC.
The purpose of the latest BTC movement is unclear, though on-chain sleuth Lookonchain believes it is part of Mt. Gox’s impending $9 billion worth of repayments. The transfer, regardless, appears to have been enough to rattle investors.
Mt. Gox moved 44,527 $BTC(2.84B) to an internal wallet 5 minutes ago, which may be preparing for repayment.#MtGox currently holds 138,985 $BTC($8.87B).https://t.co/f2q66eQNuk pic.twitter.com/JlqkZdzkPC
— Lookonchain (@lookonchain) July 16, 2024
At press time, the Bitcoin price had dropped to $62,950. That was a swift drop after it soared to $65,046 earlier today, marking its highest price level in four weeks.
Will Mt. Gox Take BTC Back To Bear Market Territory?
Bitcoin struggled to gain traction for over a month, with many observers blaming Mt. Gox refunds and the German government’s multi-billion-dollar selling spree of seized Bitcoin.
Mt. Gox, once the world’s biggest Bitcoin exchange, went under in 2014 after it lost hundreds of thousands of BTC to multiple heists. The exchange’s Rehabilitation Trustee started repaying its creditors in BTC and Bitcoin Cash (BCH) on July 4.
Approximately $9 billion worth of Bitcoin is owed to around 127,000 Mt. Gox creditors who have waited for reimbursements for over a decade. Given that the Bitcoin price has grown by over 8,450% during the past 10 years, the majority of creditors will likely want to lock in some profits.
The repayments statement noted that the rehabilitation creditors would receive funds “promptly” after the requisite conditions were satisfied. Notably, the refund is not being made directly to creditors. Instead, funds are sent to designated crypto exchanges, including Kraken, Bitstamp, SBI, Bitbank, and BitGo. The exchanges announced they would allow creditors to withdraw their Bitcoin up to 90 days after receiving the funds.
However, it’s worth noting that despite these Mt.Gox concerns, the long-term impact may be less severe as the market gradually absorbs the selling pressure.
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