Markets
This is why Mt. Gox’s $5 billion Bitcoin move matters
The defunct cryptocurrency exchange Mt. Gox has initiated a transaction involving over 75,000 Bitcoin (BTC), worth approximately $5 billion. This marks the first movement of these funds in more than five years, sending ripples through cryptocurrency markets.
Recent developments regarding Mt.Gox have attracted considerable attention, not only due to the scale of funds involved but also the potential impacts on cryptocurrency markets.
Will Mt.Gox Creditors Continue to Hold Bitcoin?
Second Arkham IntelligenceA wallet labeled “Mt. Gox” transferred BTC to a new address, 1Jbez. The cryptocurrency exchange has transferred BTC in batches of around 2,000 BTC over the past 4 hours.
Despite this substantial transfer, the Mt.Gox wallet retains approximately $9.3 billion worth of BTC assets.
To know more: Who owns the most Bitcoin in 2024?
Mt. Gox Wallet Balance. Source: Arkham
This transaction precedes the Deadline of October 31st by which Mt.Gox intends to repay its creditors. The liquidation plan involves 142,000 BTC, 143,000 Bitcoin Cash (BCH)and 69 billion Japanese yen.
The refund process follows the Tokyo District Court Approval of a request for rehabilitation. In 2021, 99% of creditors voted in favor of the reorganization plan.
The crypto community speculates that this significant move could cause a market sell-off due to the prolonged wait surrounding it Reimbursements to Mt. Gox creditors. The concern is that a substantial portion of these transferred assets may be sold on the open market.
However, not all industry leaders are pessimistic. Alex Thorn, head of research at Galaxy Digital, believes that creditors will continue to hold Bitcoin after receiving it from Mt. Gox.
“Mt Gox’s BTC has moved in the last hour, probably as distributions to creditors begin. I personally expect the majority of BTC to be held, but can’t say the same for BCH,” Thorn She said.
The market reacted quickly to this news. The value of Bitcoin it fell nearly 4% from the previous day’s high of $70,600, and is now trading at around $67,800. Likewise, Bitcoin Cash has declined by around 7% from its peak of $503.7, currently trading at around $468.
To know more: Major Failures in the Cryptocurrency Industry: What You Need to Know
Founded in 2010, Mt. Gox once handled 70% of all Bitcoin transactions globally. However, a massive cyberattack in 2014 severely impacted its operation, resulting in the loss of approximately 850,000 BTC from both client and company funds.
Although 200,000 BTC was later recovered, legal battles in Japan delayed the return to the affected parties.
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