Defunct Cryptocurrency Exchange Mt.Gox Transfers 47,228 BTC to a New Wallet Address, Triggering a Market Panic

This transfer could indicate that the Mt. Gox Rehabilitation Trustee is ready to reimburse creditors.

Defunct cryptocurrency exchange Mt.Gox has moved 47,228 BTC to a new wallet, causing بازار恐慌 and pulling Bitcoin back to prices last seen in February.

According to Arkham Intelligence, the coins, now valued at around $2.7 billion, were shifted out of a cold wallet. This marks the first major transfer of the exchange’s funds since May.

The transfer might be indicating that the Mt. Gox Rehabilitation Trustee is now ready to begin reimbursing creditors. Just last month, the trustee announced that the preparations for the repayments were finally complete, and creditors can expect to start receiving their funds in early July.

The reimbursements come after nearly a decade since the exchange collapsed in 2014. The exchange now plans to distribute $9 billion of Bitcoin to these creditors by October 2024. The distributed funds will also include 142,000 Bitcoin, 143,000 Bitcoin Cash, and 69 billion yen.

The market now anticipates that this distribution will impact Bitcoin prices if the creditors decide to sell. The ongoing “fear, uncertainty, and doubt” (FUD) has seen the global cryptocurrency market cap plunge by almost 9%.

Bitcoin Drops to $54K on Mt.Gox Selling Fears

The cryptocurrency market is currently gripped by fear as traders brace for the possible dumping of Bitcoin into the market by Mt.Gox creditors.

Bitcoin has fallen 7% in the last 24 hours, trading at $54,151 at press time. The coin is now trading at a four-month low.

According to Coinglass, crypto liquidations have topped $682 million in the last 24 hours. On-chain data shows that this was the second-largest liquidation event in Bitcoin’s history, with the largest one being in November 2022, when the FTX exchange collapsed.

Market intelligence platform Santiment also observed that the crypto industry exhibited “historic levels of FUD,” with more people selling than buying.

However, despite the negative sentiment, some traders are using the price dip to accumulate more Bitcoin. Renowned market analyst “PlanB” believes that despite the concerns around selling activities by Mt. Gox and the German government, nothing in Bitcoin’s price movement shows structural weakness that undermines price stability.

Another analyst on X, “@CryptoMichNL,” also believes the recent crash has resulted in a capitulation event. Once the selling pressure subsides and buyers enter the market again, a stable market and price recovery usually follow capitulation events.

Galaxy Digital’s Head of Research, Alex Thorn, also shared a bullish take, saying the individual Mt. Gox creditors were “diamond-handed” and thus less likely to sell.

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