Mt. Gox Moves 47,229 Bitcoin: Will the Crypto Market Face a Massive Sell-Off?

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Mt. Gox transfers $2.7B worth of $BTC to a new wallet! The move, involving 47,229 $BTC, is part of preparations for creditor repayments, with test transactions to ensure a smooth process. Analysts speculate on market impacts. Bitcoin’s price temporarily fell below $58,000 as the double whammy of the German government wallet selling and the starting of repayments from Mt Gox caused market volatility.

But will it crash BTC and the wider market? 

And it’s Started….

On July 4, 2024, defunct cryptocurrency exchange Mt Gox executed a substantial transfer of approximately 47,229 BTC, valued at around $2.71 billion, from its cold storage to a new wallet address. Data from Arkham Intelligence shows this transaction, conducted at 12:30 AM UTC on July 5, is part of the preparations for the exchange’s upcoming $9 billion repayment to creditors.

Earlier that day, Mt Gox had made several smaller bitcoin transactions, with the largest amounting to just $24 worth of BTC. The exchange, which collapsed in 2014 after a massive security breach that resulted in the loss of around 850,000 BTC, announced in late June that it would begin distributing funds to creditors in early July.

What will happen to the BTC price after Mt. Gox repayments?

While it’s too early to analyze the actual crypto impact, however, unlike the German Government news, this repayment has been planned for a long time. There’s been a lot of confusion on how much people will get, with Reuters and the BBC wrongly estimating traders will receive a tiny fraction of their original BTC.

Holders on Reddit confirmed that while they weren’t going to get back the full amount lost, the repayments would still be sizeable and worth much more than they were worth at the time of the hack. This creates the potential for a lot of selling pressure.

Expert Insight on the Market Impact

According to Mt. Gox’s trustee Nobuaki Kobayashi, the necessary steps for initiating these repayments have been completed. This significant payout is expected to introduce notable selling pressure in the market, as indicated by BTC Markets’ Crypto Analyst Rachael Lucas. 

Despite some concerns from market commentators about a potential massive sell-off, other analysts suggest that the actual amount of Bitcoin likely to be sold might be closer to $4.5 billion.

Current Market Snapshot

Bitcoin price felt the market pressure soon after the news broke out, with the cryptocurrency currently trading at around $56,994. This marks a 5.54% decline over the past 24 hours and an 18.7% drop over the last 30 days.

In a subsequent update, Arkham Intelligence reported that the new wallet address sent 2,702 BTC ($154.7 million) back to Mt Gox’s cold storage and transferred 44,527 BTC to another address starting with “16ArP.”