Bitcoin price saw a 1.5% decline today, falling below the $68,000 level, after a brief peak near $70,600 yesterday. The decline follows the latest reports that Mt Gox, the once-dominant Bitcoin exchange that collapsed in 2014, has begun processing payments to its long-waiting creditors. This issuance of nearly 75,000 bitcoins, worth more than $5.1 billion, has raised concerns about potential market liquidity and price stability.
Mt.Gox wallets transfer Bitcoin and BCH
Alex Thorn, head of research at Galaxy, a leading cryptocurrency company, provided real-time updates via X on Bitcoin movements related to Mt.Gox payments. Initially, Thorne reported the transfer of approximately 25,000 bitcoins. “About 25 thousand Bitcoins have been transferred from Mt. Gox in the last hour, likely the beginning of the distribution to creditors. (…) I personally expect most of the Bitcoins to be held, but I cannot say the same for Bitcoin Cash,” commented Thorne. , noting the mixed impact on Bitcoin versus Bitcoin Cash.
Soon after, the movements escalated rapidly. “16.5K BTC just moved, for a total of 42.9K BTC so far tonight ($2.9B),” Thorne’s updates continued. A subsequent large transfer was also noted, “Another 32.1k BTC just transferred. Total now stands at 75k BTC so far tonight ($5.1B). All moved to 1Jbez address…APs6. Possibly merging before going to creditors' trustees.” (bitgo, kraken, bitstamp).”
Another 32.1 thousand bitcoins have just been transferred. The total now stands at 75,000 BTC so far tonight ($5.1 billion).
Everyone has been moved to the 1Jbez address…APs6. Perhaps the merger will take place before going to creditors' trustees (bitgo, kraken, bitstamp)
– Alex Thorne (@intangiblecoins) May 28, 2024
The potential market impact of such large Bitcoin movements has been the subject of much speculation. Matt Walsh, General Partner at Castle Island VC, discussed the strategic purchases of Mt.Gox claims. “A lot of SPV capital purchase claims with the intention of holding BTC (in-kind distribution mechanism). I agree with your opinion on B-cash. However, I still have approximately 65k BTC scheduled to be delivered to individual creditors.
In response to Walsh, Thorne pointed out the speculative nature of these estimates. “There are many assumptions in this number,” he noted, implying that it is difficult to predict accurate market outcomes from these distributions.
The behavior of creditors who receive these payments is also subject to scrutiny. X user, Dickie Emerson, argued against the assumption that most would stick with their Bitcoin. “No idea why you would think most of the bitcoin was held. These were involuntary holds. They will get a big payday they probably wouldn't have gotten if it had never been closed (they would have sold it by now).”
In defense of his previous statement, Thorne explained why some creditors chose not to sell their bitcoins immediately. “There are some reasons to believe they will hold out. Noteworthy long-term loans make up a lot of creditors. Getting a huge payday in dollars (cap gains) but also just a 15% rebound in BTC terms.”
Thorne also noted that several creditors were offered to sell their claims and refused, indicating their intention to hold onto these coins instead. “And the average individual creditor only gets about 3.23 BTC. Are you going to dump 3 BTC now? Or hodl up? Lots of speculation here on my part no doubt. Even a small percentage of their sale can move the market as well,” Thorn added.
Confirmation of the analysis on the chain
In support of observations of the large-scale movements, James “Checkmatey” Check, a highly regarded on-chain analyst, confirmed the unfolding events. “Finally, it looks like the Mt Gox distributions are underway. About 42.9k BTC are currently in motion, worth about $2.94 billion. Congratulations to the creditors, it should be a break and a half to get these coins back. What an epic.”
Finally, it appears that the Mt Gox distribution is underway.
About 42.9 thousand $ Bitcoin On the move as we speak, it's worth about $2.94 billion
Congratulations to the creditors, it should be a break and a half to get these coins back. What an epic. https://t.co/HQCYGhloo9 pic.twitter.com/O8nRqfQwn6
– _Checkmate 🟠🔑⚡☢️🛢️ (@_Checkmatey_) May 28, 2024
Julio Moreno, also Head of Research at CryptoQuant Verified These transfers. “Outflows from Mt. Gox addresses continue: now a total of 42,829 BTC have been taken out of Mt. Gox addresses in the last few hours. All coins have been moved to a new address: 1JbezDVd9VsK9o1Ga9UqLydeuEvhKLAPs6.”
The latest developments mark a major milestone in the long saga of Mt.Gox, which once handled 70% of all bitcoin transactions before its collapse in 2014. The exchange's collapse began when it halted withdrawals due to security breaches that led to the loss of nearly 800,000 bitcoins.
After a lengthy legal and administrative process, the latest moves indicate that closure is finally in sight for creditors, despite the introduction of new variables in a volatile market.
At press time, Bitcoin was trading at $67,865.
Featured image created with Zipmex, a chart from TradingView.com
