Blockchain analytical firm Arkham Intelligence reported that crypto custodial service provider BitGo moved $2 billion of Mt. Gox’s Bitcoin to a new wallet, “bc1qpn,” according to an Aug. 13 post on X.

Currently, the wallet holds 33,023 Bitcoin, valued at $1.96 billion, following recent market fluctuations that have pushed BTC’s value to below $60,000 as of press time.

Test transactions

Earlier today, the BitGo wallet had executed a test transaction of $5.88 more than two weeks after receiving $2.19 billion in Bitcoin from the defunct Mt. Gox.

Arkham suspects the initial wallet — identified as bc1q26 — belongs to BitGo, the final exchange tasked with distributing funds to Mt. Gox creditors.

Market observers believe the test transaction could kickstart the firm’s repayment process for Mt. Gox creditors. Notably, other firms selected for the creditor distributions, including Kraken and Bitstamp, had received and distributed the funds to creditors of the failed Japanese exchange.

Meanwhile, several of Mt Gox’s creditors using BitGo have reported receiving their digital assets—BTC and Bitcoin Cash—in their accounts. However, they stated that withdrawal involves a video verification process.

BitGo, however, has yet to acknowledge receipt of the Mt. Gox Bitcoin publicly and has not responded to CryptoSlate’s request for comment as of press time.

According to Arkham data, Mt. Gox addresses currently hold 46,000 BTC, equivalent to $2.75 billion as of press time.

Mt. Gox bankruptcy

Mt. Gox, once the world’s largest crypto exchange, filed for bankruptcy in February 2014 following a hacking event that resulted in the loss of up to 950,000 bitcoins, valued at over $58 billion today.

This began a decade-long process impacted by several legal processes and delays. However, the Mt. Gox Trustee began repaying the firm’s creditors in July and has distributed Bitcoin and Bitcoin Cash to over 17,000 creditors as of July 31.

Market observers believe that the Mt. Gox repayments are a significant event for the crypto industry as it removes one of the significant barriers holding BTC’s price down. Blockchain analytical firm Glassnode stated:

“From a psychological perspective, this represents the final chapter in a major market overhang over the industry since 2013.”

Mentioned in this article

Bankrupt Mt. Gox continued its Bitcoin transfers this morning by moving 37,477 BTC, equivalent to $2.47 billion, to an untagged address, 12Gws9, according to data from Arkham Intelligence.

The dashboard shows that the firm moved 5,106 BTC through a cold wallet to another untagged address beginning with 1MzhW.

Market observers said these transactions are part of Mt Gox’s effort to repay creditors. The firm began repaying creditors impacted by its 2014 collapse earlier this month and committed to paying over $9 billion in BTC.

Meanwhile, these latest transfers follow the failed firm movement of about $2.8 billion BTC to a new address on July 23. Of this amount, Arkham reported that Mt. Gox shifted  5,110 BTC, worth $340.1 million, to four separate Bitstamp addresses.

Blockchain analytical platform Lookonchain said the defunct exchange had moved 52,549 BTC, worth $3.31 billion, to three centralized crypto exchanges, including Bitstamp, Kraken, and Bitbank, since July 5. The three crypto platforms are among the five exchanges working with the Mt. Gox trustee to return creditors’ funds.

Despite its consistent Bitcoin movement, Mt. Gox still holds more than 90,000 BTC, estimated to be worth $5.97 billion, according to Arkham Intelligence data.

Kraken completes repayments

In a parallel development, Kraken said it successfully distributed the Bitcoin and Bitcoin Cash from the Mt Gox estate back to creditors.

On July 23, Kraken CEO Dave Ripley said:

“While frivolous lawsuits got in the way of earlier payments, we are extremely grateful to the Trustee for keeping the coins safe and HODLing the vast majority of BTC all this time. The preservation of value is exemplary and is surely appreciated by all creditors.”

The Kraken repayment was completed around a week after the firm confirmed receipt of the Mt. Gox creditors’ funds.

Mentioned in this article

The bankrupt Mt. Gox exchange moved a total of $2.85B BTC to new wallets this morning, according to blockchain analytical firm Arkham Intelligence.

As part of its creditor repayment efforts, Mt. Gox transferred 5,110 BTC, worth $340.1 million, to four separate Bitstamp addresses.

Arkham reported that 1,598 BTC, valued at $106 million, went to a Bitstamp cold wallet. The rest was split among three other Bitstamp addresses: 382.4 BTC ($25.44 million) to 3CgKHX, 2,239 BTC ($149.1 million) to 3QVD5H, and 890.9 BTC ($59.3 million) to 3DgJ7MPGS.

On July 22, CryptoSlate noted that Mt. Gox had conducted several test transactions with Bitstamp, one of five exchanges the Mt. Gox Trustee is using to return funds to creditors. Other exchanges, including Kraken, have also confirmed receipt of the funds, with Bitbank and SBI VC Trade already distributing theirs to creditors.

Mt. Gox began repaying creditors affected by its 2014 hack earlier this month. The firm committed to paying over $9 billion in BTC and $73 million in Bitcoin Cash to impacted traders.

While some feared that this move would lead to heavy market volatility, market experts have described the news as unnecessary FUD against the top digital asset. Ki Young Ju, the CEO of CryptoQuant, said:

“MtGox FUD is overestimated. Market cap growth outpaces realized cap growth, showing strong demand. Since 2023, $224 billion in Bitcoin sold, yet price is up 350%. Even if MtGox’s $3 billion is sold on Kraken, it’s just 1% of the realized cap increase in this bull cycle — manageable liquidity.”

Meanwhile, the latest transfer coincided with Bitcoin’s price drop below $66,500, according to CryptoSlate’s data.

Mt Gox still holds a substantial amount of BTC. As of press time, wallets labeled as Mt. Gox on Arkham’s dashboard hold 85,234 BTC, equivalent to $5.70 billion.

Mentioned in this article

Crypto exchange Kraken said it received Mt. Gox creditors’ funds, according to an email statement seen by CryptoSlate.

According to the email:

“We have successfully received creditor funds (BTC and BCH) from the Mt. Gox Trustee. While we will work to distribute funds as quickly as possible, please anticipate 7-14 days for funds to be credited to your account. The amount you will receive has been determined by the Trustee, and we will distribute according to their instructions.”

Earlier today, Mt. Gox transferred approximately 92,000 BTC, valued at $5.8 billion, to four unnamed addresses, according to the blockchain analytical platform Arkham Intelligence.

The firm reported that the defunct exchange moved 48,641 BTC, valued at $3.07 billion, to the address 3JQie. Initially, these funds were sent to Mt. Gox 1Jbez before being transferred entirely to 3JQie.

The failed exchange also moved 42,587 BTC, valued at $2.7 billion, to 18vjnB, 527 BTC, estimated to be worth $33.63 million, to 1HRAp, and 0.02 BTC, equivalent to $1,300, to 1JJ8oBa.

Market observers, including blockchain analyst Lookonchain, suggest these transactions are in preparation for the firm’s repayment efforts.

On July 5, the exchange announced it had begun repaying creditors through designated crypto exchanges according to its rehabilitation plan. Notably, reports indicated that the timeline for payouts may vary across exchanges.

Meanwhile, the Mt. Gox wallet still holds nearly 139,000 coins worth over $8.7 billion despite these transfers, according to Arkham’s platform.

Market reacts to Bitcoin movement

Mt. Gox’s recent Bitcoin movements have increased selling pressure on the leading digital asset. According to CryptoSlate’s data, BTC’s price dropped from about $65,000 earlier today to $63,500 at press time.

This sudden price drop resulted in the liquidation of approximately $13 million from traders speculating on the market’s price movement within the last four hours, according to Coinglass data.

Despite this, many analysts remain optimistic. They note that the market absorbed the German government’s recent Bitcoin sales without major issues. Over the past month, the German government sold around 50,000 Bitcoin through several transactions that spooked the broader market.

Toby Cunningham, the co-host of the popular crypto show Crypto Tips, stated:

“First, it was Germany selling Bitcoin and now it’s MT Gox. Dollar cost average and HODL because there will always be someone or something selling.”

Mentioned in this article

Bitcoin price slumped to a five-month low of under $55,000 after the defunct exchange Mt. Gox confirmed that it has begun repaying creditors.

Mt. Gox begins repayment

On July 5, Mt. Gox’s Rehabilitation Trustee announced it has started repaying creditors through designated crypto exchanges according to the rehabilitation plan.

Eligible creditors will receive prompt repayments if they meet certain conditions. These include confirming the validity of registered accounts, accepting the intention to subscribe to an agreement by designated crypto exchanges, and completing discussions with the trustee.

This confirmation followed the failed firm’s movement of a substantial amount of Bitcoin in several transactions today. According to Arkham Intelligence data, Mt. Gox moved 47,228.7 BTC, valued at $2.71 billion, to a new wallet. The assets were subsequently transferred in several transactions, including 1,545 BTC, worth $85 million, to a wallet connected to the Bitbank exchange.

Meanwhile, crypto community members have welcomed this development as it ends Mt. Gox’s creditors’ 10-year wait for their digital assets. In 2014, Mt. Gox suffered a massive hack, losing 850,000 Bitcoin—valued at over $57 billion today. After the hack, Mt. Gox filed for bankruptcy and began rehabilitation proceedings in 2018 to compensate creditors.

Bitcoin crashes under $55K

Following the Mt. Gox repayment news, Bitcoin’s price fell more than 7.2% to $54,209. According to CryptoSlate’s data, this is the first time the asset has dropped below the $55,000 mark since February 2024.

Reports revealed that the decline triggered one of the largest liquidation events the industry has seen this year. According to Coinglass, crypto traders speculating on the price of digital assets on the market lost more than $675 million in the past 24 hours.

Long traders betting on a price increase lost approximately $578 million, while short traders have lost $98 million.

Bitcoin traders suffered the highest losses, with over $225 million liquidated in the past day. Ethereum traders saw liquidations totaling approximately $167 million. Notably, Bitcoin Cash, another digital asset involved in the Mt. Gox repayment, also saw about $3.8 million in liquidations.

Mentioned in this article

The following is a guest post by Nischal Shetty, co-founder and President at Shardeum.

Mt. Gox’s dormancy might not be over, but a series of tokens moving out from its wallets has caught the attention of the market. A total of 137,890 BTC valued at $9.4 billion is presumed to be headed to creditors’ wallets, and this has warranted a mixed set of responses from experts, most of whom are concerned about a potential increase in selling pressure and a subsequent drop in Bitcoin’s price.

Mt. Gox was once the world’s leading Bitcoin exchange before it was hacked in 2014, leading to the loss of over 850,000 BTC. After years of legal battles, Japanese authorities finally approved a rehabilitation plan in 2021, launching a legal procedure known as “civil rehabilitation,” allowing creditors to recover some portion of their lost funds.

The plan has become effective as creditors who lost their funds are now allocated a part of the remaining ones. Mt. Gox’s planned repayments to creditors might have played some role in a 4% decline in Bitcoin’s price over the past 24 hours, which the market was able to shake off with an eventual rebound. However, there is a concern that these newly freed coins will flood the market, leading to a selloff and driving the price down further.

In an official statement, Mark Karpeles, former CEO of Mt. Gox, confirmed that while Bitcoin sell-offs aren’t happening now, tokens being moved from Mt.Gox to a new wallet is part of the larger plan to distribute to creditors. 

Understanding Long-Term Holders (LTHs) and Short-Term Holders (STHs)

The Bitcoin market can be broadly divided into two categories based on investor holding times: Long-Term Holders (LTHs) and Short-Term Holders (STHs).

• LTHs: These investors have held onto their Bitcoin for over 155 days. They are generally considered more resolute and less likely to panic sell during market downturns.
• STHs: These investors have bought Bitcoin within the past 155 days. They are typically more reactive to market news and events and might be quicker to sell in response to negative sentiment.

Historical LTH Selloff vs. Mt. Gox Repayments

CryptoSlate Senior Analyst James Van Straten shares a perspective that sheds light on the potential of the Mt. Gox repayment event on the market. He shared on his X account how Grayscale Bitcoin Trust and Long Term Holders sold around 1M BTC in the last five months.

The market has been able to showcase impeccable resilience in absorbing these sell-offs. In comparison, Mt. Gox’s repayments to its creditors would be 1/10th of the 1M BTC sold.

The recent Bitcoin rally, which reached an all-time high this year before the halving, was strong enough to incentivize some Long-Time Holders to sell, as indicated by a decrease in their total supply. Van Straten argues that this recent LTH selloff would dwarf the amount of Bitcoin released through Mt. Gox repayments.

Data and Market Analysis

According to on-chain data, research firm Glassnode released earlier this year that the number of Bitcoin addresses holding onto coins for more than 5 years reached a new low, suggesting some long-term investors were taking profits. The massive BTC movement has raised concerns that Mt. Gox creditors might decide to sell their recovered coins on exchanges, flooding the market and driving down prices.

This fear is amplified by the fact that the average daily inflow of Bitcoin to exchanges has been hovering around 2016 levels, suggesting potentially lower liquidity to absorb a large sell-off.

But compared to this larger LTH selloff, the impact of Mt. Gox repayments might be less impactful for the market. It’s important to remember that not all creditors who receive their BTCs will immediately sell their recovered Bitcoin. And the distribution hasn’t come into effect formally as yet.

Among the creditors, some might choose to hold, or buy more, based on their individual investment strategies. While the immediate market reaction might be negative due to short-term investor jitters, the long-term impact of Mt. Gox repayments could be positive. Increased institutional adoption often follows periods of market consolidation, and resolving the Mt. Gox saga could improve investor confidence in the overall health of the Bitcoin ecosystem.

Conclusion

The Mt.Gox saga and its potential impact on Bitcoin price highlight some loopholes better addressed at this crucial point of market maturity.

While short-term volatility is to be expected, especially when large amounts of coins are moved, market stability and an increase in liquidity could boost investor confidence and set a secure tone for the long-term implications of Bitcoin’s performance. 

Mentioned in this article

The Rehabilitation Trustee of the defunct crypto exchange Mt. Gox has confirmed that it has not sold its significant Bitcoin holdings despite transferring over 140,000 BTC (approximately $10 billion) today.

The trustee clarified in a May 28 statement that preparations to repay creditors were ongoing. According to the firm, the bankruptcy process will compensate creditors with fiat currency, Bitcoin, and Bitcoin Cash. While fiat currency payments have already begun, creditors have not received digital asset payments.

It added:

“The Rehabilitation Trustee is currently managing bitcoin and bitcoin cash in a secure manner. As the Rehabilitation Trustee is proceeding with the preparation for the above repayments, please wait for a while until the repayments are made.”

Former Mt. Gox CEO Mark Karpeles explained that the transactions were part of the distribution process. He stated: He said:

“The trustee is moving coins to a different wallet in preparation of the distribution that will likely happen this year, there is no imminent sale of bitcoins happening.”

Mt. Gox’s Bitcoin and BCH on the move

Earlier today, the crypto community noticed multiple transactions from wallets associated with the failed Mt. Gox exchange.

Blockchain analytics platform Arkham Intelligence reported that 72 Mt. Gox-linked wallets sent 141,686 BTC in batches of about 2,000 BTC to a new wallet, which received its first transaction of $3.65 on May 20.

The new address has since transferred almost 4,022 BTC, worth over $273 million, to other wallets.

Additionally, Mt. Gox-related addresses moved 142,846.22 BCH to an unmarked address labeled 1LG4G. The wallet currently holds 142,824.27 BCH, worth about $67.9 million, making it the 11th largest BCH holding address.

This movement has led to speculation within the community that Mt. Gox might soon start repayments. Alex Thorn, the Head of Research at Galaxy Digital, suggested this could be the beginning of distributions to creditors.

Meanwhile, the transfers appeared to have sent jitters down the market, with Bitcoin’s price declining below $69,000 to $68,392 as of press time. Similarly, BCH’s value recorded a 4.03% fall to $470, according to CryptoSlate’s data.

Mentioned in this article