Mt. Gox’s $700M Bitcoin Transfer Marks First Major Activity in Weeks
M Key Takeaways
- Mt. Gox has to repay claimants.
- Arkham Intelligence reports that the now-defunct Mt. Gox exchange transferred 13,265 BTC on the blockchain.
- Alex Thorn from Galaxy estimates that only 1,265 BTC might be sold in the market.
Scandal-ridden Bitcoin exchange Mt. Gox is on the verge of executing one of the largest repayments in history, a full decade after ceasing operations.
Early on Wednesday, Aug. 21, a wallet linked to the closed exchange transferred 13,265 BTC, valued at approximately $784 million.
Mt. Gox Releases More Bitcoin, Market Impact Continues
Arkham Intelligence reports that Mt. Gox’s trustee transferred 12,000 BTC from its Bitcoin stash to a wallet labeled “1PuQB.” The remaining Bitcoins were moved to another wallet, “1Jbez,” which the platform has identified as Mt. Gox’s cold storage.
Investors are on edge, waiting for a potential Bitcoin downturn following the Mt. Gox transfer, but so far, nothing’s happened. And experts don’t think anything will – at least, not because of this.
Furthermore, AML Bot has confirmed to CCN that an additional $75 million was moved to the cryptocurrency exchange Bitstamp.
AML Bot told CCN:
“The address 1PuQBjpPfAuANa3KM4HBdfF98BC7wnWhTb could be associated with crypto-exchange, Bitstamp while address 1JbezDVd9VsK9o1Ga9UqLydeuEvhKL APs6 is another Mt. Gox address that received change payment. Previously MT. GOX has transferred 95,523 BTC to crypto exchanges like Kraken, Bitbank, BitGo and BitStamp.”
Gox Distribution Likely to Have Minimal Effect on Bitcoin Market
Alex Thorn, the head of research at Galaxy Digital, suggested that the recent on-chain movements may not necessarily lead to significant selling pressure in the market.
Thorn explained, referring to his June tweet , that creditors accepted a roughly 10% reduction to receive the “early” payout.
He estimates that about 75% of BTC holders opted for this early payout, leaving about 95,000 coins for early payment.
Of these, around 20,000 coins are owed to claims funds, and about 10,000 coins are owed to the Bitcoinica bankruptcy, leaving roughly 65,000 coins for individual creditors.
This figure is significantly lower than the 141,868 coins frequently cited by the media. However, he suggested individual creditors may hold on to their coins longer than expected due to several reasons:
- Many creditors are long-term Bitcoin enthusiasts who are tech-savvy and were early adopters.
- Individual creditors have consistently turned down attractive offers from claims funds, indicating a preference for receiving their coins rather than a cash payout.
- The capital gains impact from selling would be considerable, given the substantial price appreciation since the bankruptcy—creditors are up approximately 140 times in USD terms on their recovered coins, even with only a 15% recovery in kind.
Thorn noted that if even 10% of the 65,000 coins are sold, it would mean 6,500 BTC entering the market, likely through sales on exchanges. He noted that creditors will receive their coins through accounts at Kraken, Bitstamp, or BitGo, with most being deposited directly into their trading accounts.
Mt. Gox Transfered $5 Billion So Far
After transferring billions of dollars in cryptocurrency to exchanges like Kraken and Bitstamp, Mt. Gox is on the move again. This time, it has shifted $5 billion in Bitcoin to new addresses.
Defunct cryptocurrency exchange Mt. Gox has moved another substantial chunk of its Bitcoin holdings. According to blockchain analysis firm Arkham Intelligence , the platform transferred over $2 billion worth of BTC to an address starting with bc1q2 and bc1q, two addresses linked to BitGo, on Tuesday, July 30.
BitGo is the fifth and final custodian working with the Mt. Gox Trustee to return funds to creditors.
This latest transaction is part of the ongoing process to redistribute approximately $9 billion in Bitcoin assets to creditors defrauded in the 2014 hack that crippled the exchange.
Since early July, Mt. Gox has been gradually sending billions of dollars worth of BTC to various exchanges, including Bitstamp, Kraken, Bitbank, and SBI VC Trade. Bitstamp has already commenced distributing funds to its eligible creditors.
Despite these transfers, Mt. Gox still holds a substantial Bitcoin reserve of over $3 billion after moving over $5 billion. The impact of the entire redistribution process on the Bitcoin market remains uncertain. While some creditors may be tempted to liquidate their newfound wealth, leading to potential selling pressure, others are expected to hold onto their BTC due to its significant appreciation since the 2014 hack.
The news had no major impact on the Bitcoin price , as it decreased by just 1.1% to $66,211.56 at the time of writing.
Mt. Gox Creditors Are Mostly HODLers
To date, approximately 41% of the recovered 142,000 BTC from the Mt. Gox hack has been distributed to creditors through Kraken and Bitstamp.
According to a recent Glassnode report , the percentage of Bitcoin held by new investors is decreasing as market sentiment shifts towards a long-term holding strategy, commonly known as HODLing.
The research firm observed a notable increase in the number of wallets holding Bitcoin for more than six months, suggesting that investors are adopting a buy-and-hold approach. Notably, Glassnode speculates that creditors of the defunct Mt. Gox exchange are likely to follow this trend and hold onto their Bitcoin rather than sell, further supporting the HODLing trend.
Glassnode further supported the trend by highlighting the decreasing selling pressure from long-term holders (LTHs), who currently own 45% of the total Bitcoin supply. This ownership percentage is notably higher than historical levels observed at market peaks, indicating a strong conviction among seasoned investors.
Bitcoin bull markets typically induce selling pressure as rising prices tempt long-term holders to realize profits. This behavior was evident in March and April as the Supply Last Active 1y+ and 2y+ metrics declined significantly. These metrics indicate that long-term investors were actively spending or selling their Bitcoin to meet the surging demand leading up to the $73,000 all-time high. However, the rate of decline in these curves has recently moderated, suggesting a potential return to a HODLing-dominated market.
Kraken Starts Mt. Gox Creditor Repayments
Jesse Powell, co-founder of Kraken, shared in a post on X that it was a “glorious” day for Mt. Gox creditors as they began receiving their long-awaited funds. Reflecting on the lengthy journey, Powell expressed relief at closing this historic chapter.
The payout to Kraken creditors follows a major transfer by Mt. Gox, which moved 37,477 Bitcoin (approximately $2.47 billion) to an unidentified wallet on July 16, according to Arkham Intelligence . Kraken confirmed that it had received $3 billion from the Mt. Gox Trustee and announced plans to distribute these funds to creditors within a fortnight.
Despite concerns about potential market pressure from the large disbursement, Bitcoin has demonstrated resilience, maintaining a price above $66,000.
Interestingly, Kraken isn’t the only exchange to receive funds from the Mt. Gox Trustee. Bitstamp has also received a substantial amount.
On July 24, Mt.Gox transferred 5,106 Bitcoins, worth approximately $335 million, to Bitstamp in two transactions. The first transaction involved sending 2,237 BTC, valued at $147 million, directly to Bitstamp. The second transaction saw approximately 2,869 BTC, worth $65,962 each, being transferred to an undisclosed address.
Mt. Gox $9B Bitcoin Repayment Sparks Market Volatility Concerns
On Thursday, July 4, 2024, the crypto market trembled as Mt. Gox moved billions to new wallet addresses in preparation for the payout.
According to the post by Arkham Intelligence , a cold storage wallet linked to Mt. Gox transferred 47,228 BTC to a wallet address ending in “6onk.” The transfer is likely part of the exchange’s scheduled early July creditor repayments, as Mt. Gox aims to distribute $9 billion in Bitcoin to its creditors.
Hours later, Arkham Intelligence updated that the new wallet address returned 2,702 BTC (valued at $154.7 million) to Mt Gox’s cold storage and transferred 44,527 BTC to another address starting with “16ArP.”
Subsequently, at 6:30 AM CET, the 2,702 Bitcoins that Mt. Gox had sent were moved again to a different wallet.
Mt. Gox Users See End of the Tunnel
Over a decade after the exchange’s collapse due to a 2014 hack, creditors of Mt. Gox are finally seeing progress toward recovering their funds. A verification process the trustee led in January has facilitated the delayed return of the funds. While the exact dates for payouts to designated exchanges remain undisclosed, the process is evidently advancing.
In June, the exchange’s trustee, Nobuaki Kobayashi, confirmed that preparations for repayment were complete and would commence early July as planned.
The total disbursement, expected by Oct. 2024, includes 142,000 Bitcoin, 143,000 Bitcoin Cash, and 69 billion yen. This significant distribution marks a crucial step in resolving one of the crypto’s longest-standing issues.
Mt. Gox to Return Billions in Bitcoin and Bitcoin Cash to Hack Victims
In June, Mt. Gox announced it would begin distributing recovered Bitcoin (BTC) and Bitcoin Cash (BCH) to creditors starting in July 2024.
This marked a significant milestone in the ongoing rehabilitation plan that commenced following the exchange’s collapse in 2014 due to a massive hack. After the repayments were made public, the crypto community began speculating if Bitcoin had reached its lowest point.
According to court documents and creditor reports, Mt. Gox said it plans to distribute a significant amount of recovered cryptocurrency in the following way:
- 142,000 BTC: This sum, valued at around $8.8 billion based on the current Bitcoin price of $62,000 per BTC, represents part of the Bitcoin lost in the 2014 hack.
- 143,000 BCH: With the current price of Bitcoin Cash at approximately $650 per BCH, this amount is valued at roughly $400 million.
The precise timeline for the distribution was still unclear, but creditors will receive their shares in proportion to their claims. According to the notice, Mt Gox will process repayments through approved cryptocurrency exchanges.
Crypto Market on Edge: Mt. Gox to Inject Billions, Bitcoin Fate Uncertain
The impending Mt. Gox distribution could have varied effects on the cryptocurrency market. The release of a significant amount of Bitcoin Cash (BCH) might increase supply and exert downward pressure on its price. However, creditors who might seek to sell or trade their BCH could counterbalance this, potentially driving up demand.
For Bitcoin (BTC), the impact may be minor. The amount Mt. Gox will give to its creditors is a small fraction of the total circulating supply. So, its direct effect on the price is likely to be minimal. Nevertheless, the overall sentiment surrounding Mt. Gox’s asset return could temporarily influence market attitudes toward Bitcoin.
Currently, as news of the forthcoming repayments spreads, Bitcoin is trading at $62,100 . However, it has seen a 2.7% drop in the past 24 hours and a 5.3% decline over the past week.
Sparking Bitcoin Bottom Speculation: Could History Repeat?
Following the public announcement of the repayments, the crypto community began speculating whether Bitcoin has reached its bottom, drawing on historical patterns for insight.
Historically, fear, uncertainty, and doubt (FUD) surrounding Mt. Gox often signal the final dip before Bitcoin starts to rise again. The most recent instance was on Jan. 23rd, which marked the bottom before Bitcoin surged to a new all-time high.
Analyzing the BTC/USD chart reveals a double-bottom pattern. This is a bullish reversal indicator suggesting potential upward price movements after each identified bottom.
Mt.Gox Trustee Suspends Release of Exchange’s Bitcoin Addresses List
