Scandal-ridden Bitcoin exchange Mt. Gox is on the verge of executing one of the largest repayments in history, a full decade after ceasing operations.
Mt. Gox Transfered $5 Billion So Far
Defunct cryptocurrency exchange Mt. Gox has moved another substantial chunk of its Bitcoin holdings. According to blockchain analysis firm Arkham Intelligence , the platform transferred over $2 billion worth of BTC to an address starting with bc1q2 and bc1q, two addresses linked to BitGo, on Tuesday, July 30.
BitGo is the fifth and final custodian working with the Mt. Gox Trustee to return funds to creditors.
This latest transaction is part of the ongoing process to redistribute approximately $9 billion in Bitcoin assets to creditors defrauded in the 2014 hack that crippled the exchange.
Since early July, Mt. Gox has been gradually sending billions of dollars worth of BTC to various exchanges, including Bitstamp, Kraken, Bitbank, and SBI VC Trade. Bitstamp has already commenced distributing funds to its eligible creditors.
Despite these transfers, Mt. Gox still holds a substantial Bitcoin reserve of over $3 billion after moving over $5 billion. The impact of the entire redistribution process on the Bitcoin market remains uncertain. While some creditors may be tempted to liquidate their newfound wealth, leading to potential selling pressure, others are expected to hold onto their BTC due to its significant appreciation since the 2014 hack.
The news had no major impact on the Bitcoin price , as it decreased by just 1.1% to $66,211.56 at the time of writing.
Mt. Gox Creditors Are Mostly HODLers
To date, approximately 41% of the recovered 142,000 BTC from the Mt. Gox hack has been distributed to creditors through Kraken and Bitstamp.
According to a recent Glassnode report , the percentage of Bitcoin held by new investors is decreasing as market sentiment shifts towards a long-term holding strategy, commonly known as HODLing.
The research firm observed a notable increase in the number of wallets holding Bitcoin for more than six months, suggesting that investors are adopting a buy-and-hold approach. Notably, Glassnode speculates that creditors of the defunct Mt. Gox exchange are likely to follow this trend and hold onto their Bitcoin rather than sell, further supporting the HODLing trend.
Glassnode further supported the trend by highlighting the decreasing selling pressure from long-term holders (LTHs), who currently own 45% of the total Bitcoin supply. This ownership percentage is notably higher than historical levels observed at market peaks, indicating a strong conviction among seasoned investors.
Bitcoin bull markets typically induce selling pressure as rising prices tempt long-term holders to realize profits. This behavior was evident in March and April as the Supply Last Active 1y+ and 2y+ metrics declined significantly. These metrics indicate that long-term investors were actively spending or selling their Bitcoin to meet the surging demand leading up to the $73,000 all-time high. However, the rate of decline in these curves has recently moderated, suggesting a potential return to a HODLing-dominated market.
Mt. Gox $9B Bitcoin Repayment Sparks Market Volatility Concerns
On Thursday, July 4, 2024, the crypto market trembled as Mt. Gox moved billions to new wallet addresses in preparation for the payout.
According to the post by Arkham Intelligence , a cold storage wallet linked to Mt. Gox transferred 47,228 BTC to a wallet address ending in “6onk.” The transfer is likely part of the exchange’s scheduled early July creditor repayments, as Mt. Gox aims to distribute $9 billion in Bitcoin to its creditors.
Hours later, Arkham Intelligence updated that the new wallet address returned 2,702 BTC (valued at $154.7 million) to Mt Gox’s cold storage and transferred 44,527 BTC to another address starting with “16ArP.”
Subsequently, at 6:30 AM CET, the 2,702 Bitcoins that Mt. Gox had sent were moved again to a different wallet.
Mt. Gox Users See End of the Tunnel
Over a decade after the exchange’s collapse due to a 2014 hack, creditors of Mt. Gox are finally seeing progress toward recovering their funds. A verification process the trustee led in January has facilitated the delayed return of the funds. While the exact dates for payouts to designated exchanges remain undisclosed, the process is evidently advancing.
In June, the exchange’s trustee, Nobuaki Kobayashi, confirmed that preparations for repayment were complete and would commence early July as planned.
The total disbursement, expected by Oct. 2024, includes 142,000 Bitcoin, 143,000 Bitcoin Cash, and 69 billion yen. This significant distribution marks a crucial step in resolving one of the crypto’s longest-standing issues.
Several Mt. Gox creditors have updated their claims recently, indicating progress in receiving repayments in both cryptocurrency and fiat currency.
Initial reports surfaced on the Mt. Gox insolvency Subreddit in mid-April, where users shared details about expected payments reflected in their account’s repayment data table. Additionally, some creditors have reported successfully receiving fiat currencies in their bank accounts.