Mt. Gox has initiated test transactions to facilitate creditor repayments through the Bitstamp cryptocurrency exchange. The first transactions were executed from the Mt. Gox wallet to Bitstamp’s cold wallets.
Blockchain intelligence firm Arkham Intelligence flagged these movements in a July 22 X post, noting the deposits of $1 to four separate Bitstamp deposit addresses. This step signals the nearing repayment process, as Bitstamp is one of five exchanges collaborating with the Mt. Gox Trustee.
THIS MORNING: MT GOX MOVING FUNDS
Mt. Gox addresses deposited $1 to 4 separate Bitstamp deposit addresses. Bitstamp is 1 of 5 exchanges working with the Mt. Gox Trustee to facilitate creditor repayments.
Mt. Gox currently holds: $6.08B in BTC
These transfers are likely to… pic.twitter.com/uyOLL7O065
— Arkham (@ArkhamIntel) July 22, 2024
The overall repayment involves over $9.4 billion worth of Bitcoin owed to approximately 127,000 creditors who have awaited recovery for more than a decade. The test transactions are preliminary and aim to ensure the accuracy of the repayment process before larger sums are transferred. Consequently, this move highlights the forthcoming distribution of significant Bitcoin amounts.
Concerns About Market Impact and Investor Sentiment
The potential impact on Bitcoin’s market price remains a point of concern among investors. With the majority of Mt. Gox creditors expected to sell their Bitcoin, there could be considerable downward pressure on Bitcoin’s value, currently priced at $66,793.
Finance analyst Jacob King predicts that up to 99% of creditors may liquidate their holdings upon receipt. This influx of Bitcoin into the market could result in a gradual but significant drop in prices over the coming weeks.
Despite these concerns, a recent Reddit community poll reveals that 56% of Mt. Gox creditors intend to hold onto their Bitcoin rather than sell. Only about 20% of respondents plan to sell their assets. This divergence in expected actions may influence market dynamics differently from anticipated.
Major Bitcoin Holders Remain Active
While concerns over potential sell pressure persist, large Bitcoin holders, known as whales, continue their buying activities without hesitation. On July 17, a prominent whale purchased 245 BTC, worth nearly $16 million.
The buyer has traded Bitcoin only twice this year, achieving over $30 million in profits from these transactions. As of July 17, the Mt. Gox-associated wallet holds over 90,300 Bitcoin, valued at approximately $6.12 billion, according to Arkham Intelligence data.
The timing for resuming Mt. Gox repayments remains uncertain. However, today’s test transactions indicate that the final preparations are underway, with Bitstamp set to play a crucial role in the forthcoming repayment phase.
The initiation of test transactions by Mt. Gox marks a step toward repaying creditors. While market concerns about potential sell pressure exist, the actual impact remains to be seen.
Also Read: Mt. Gox Creditor Accounts Targeted With Brute Force Attack