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

Mt. Gox has made headlines again by transferring $2.7 billion worth of Bitcoin ($BTC) to a new wallet. This significant move, involving 47,229 BTC, is part of the preparations for creditor repayments, with test transactions ensuring a smooth process. Analysts are now speculating on the potential market impacts.

Notably, Bitcoin’s price temporarily dipped below $58,000 due to the combined effects of the German government wallet selling and the initiation of repayments from Mt. Gox, causing market volatility.

Will Bitcoin Crash Due to This Move?

On July 4, 2024, the now-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 that 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 resulting in the loss of around 850,000 BTC, announced in late June that it would begin distributing funds to creditors in early July.

Market Speculation and Confusion

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

Holders on Reddit confirmed that while they aren’t going to get back the full amount lost, the repayments will still be substantial and worth much more than at the time of the hack. This situation creates the potential for significant selling pressure.

Market Predictions

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’s price felt the market pressure soon after the news broke, 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.”

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The coming weeks could be a wild ride for Bitcoin. Stay tuned for further updates.