The impending Bitcoin distribution from Mt. Gox has been looming over the crypto market ever since the order to begin repaying creditors was issued. Given the massive amount of Bitcoin in Mt. Gox’s vault, the distribution is expected to put massive selling pressure on the asset. Now that the coins have started moving, the crypto market is already responding, even though the repayment has yet to begin.
Mt. Gox Transfers 47,229 BTC to Unknown Wallet
In the early hours of Tuesday morning, the Mt. Gox Bitcoin wallet was shut down. done A high-profile transaction has caused a stir in the cryptocurrency community. The transaction, reported by on-chain data tracking and aggregation site Arkham Intelligence, involved approximately 47,229 BTC.
A number of initial transactions were made from a Bitcoin wallet marked “Mt. Gox” to another wallet marked “Mt. Gox: Cold Wallet.” In total, 47,229 Bitcoin were sent to the cold wallet. However, once the coins arrived, they were moved from the cold wallet to another, anonymous wallet.
At the time of this move, Bitcoin was worth about $3 billion. To put that into perspective, that’s roughly the same amount of Bitcoin that the German government has sold over the past few weeks, which has sent the price of Bitcoin and the cryptocurrency market crashing.
Given the size of Bitcoin, it is expected that the introduction of these coins to the market will lead to a decline similar to what happened with the German government’s sell-off. In this case, the price of Bitcoin may return to the $50,000 area again.
Interestingly, this deal is only a third of the total amount that Mt. Gox is expected to pay to creditors. The bankrupt exchange had previously moved 47,000 BTC, which had little impact on the market. Around 150,000 BTC is expected to be paid to creditors, worth $9 billion. So, if Mt. Gox’s entire BTC supply hits the market, it could lead to a massive crash.
Bitcoin price reacts to this move
Following Bitcoin’s move on Mt. Gox, assets across the crypto market reacted negatively, rapidly falling in response. For example, the price of BTC dropped from over $64,000 to under $63,000 in less than an hour, dragging the rest of the market down with it.
Bitcoin’s daily trading volume has also seen a sharp increase, rising 44% to over $38 billion. This indicates increased activity among investors, and since the price is falling, it suggests that investors are selling Bitcoin rather than buying it at this point.
Featured image created using Dall.E, chart from Tradingview.com