July 14, 2024
Mt. Gox Transfers $2.71 Billion in Bitcoin Ahead of Creditor Repayments
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Mt. Gox $2.71B Bitcoin Transfer Drops Bitcoin to $54K

The defunct cryptocurrency exchange, Mt. Gox, transferred a substantial amount of Bitcoin, totaling $2.71 billion, earlier today as part of preparations for creditor repayments scheduled to occur this month. This significant transfer sent shockwaves through the crypto market, causing the price of Bitcoin to plummet to $54,000.

Market Concerns and Price Fluctuations

Investors have previously expressed concerns about the potential negative impact this repayment event could have on Bitcoin’s price. These concerns are beginning to materialize, as following the transfer, the price of BTC dipped to the $53,000 mark. However, at the time of writing, the price has recovered and is now trading above $54,000.

Mt. Gox Sends Over 47,000 BTC to New Wallet

A sophisticated blockchain transaction tracker called Arkham Intelligence claims that the defunct cryptocurrency exchange based in Japan transferred precisely 47,228 Bitcoin, worth $2.71 billion, from its cold storage to a new wallet that is yet to be identified. The start of the transaction was at 00:27:24 UTC. The new wallet’s identity is unknown, but it’s thought to be connected to one of the five exchanges—Bitstamp, Bitbank, Bitgo, Kraken, and SBI VC Trade—that were chosen to help with the reimbursements.

Source: Arkham Intelligence

Less than twenty-four hours have passed since the exchange carried out a test transfer on July 4. To activate the wallet, Mt. Gox reportedly sent a small transfer of $24 in Bitcoin to an address connected to Bitbank, one of the affiliated cryptocurrency exchanges, according to a previous report from 36crypto. Remarkably, the confirmation of the over 47,000 Bitcoin moved by Mt. Gox places it as the second-largest Bitcoin liquidation event in history, after the collapse of FTX in November 2022, which cost investors and users almost $9 billion.

Investor Concerns and Market Reactions

Investors who were concerned that the price of Bitcoin would drop significantly once the repayments were finished increased the pressure to sell the cryptocurrency after Mt. Gox had previously stated that it would start making repayments in early July. It is important to remember that when Mt. Gox crashed in 2014, Bitcoin was trading at about $600. Investors will receive more than 100 times their initial holdings at the current price. There have been rumors that creditors may swiftly turn a profit by selling off their repayments as a result of this circumstance. Although unconfirmed, this potential has caused market turbulence and driven the price of Bitcoin to levels not seen since February 26.

Analysts Address Market FUD

In the interim, several well-known cryptocurrency analysts have made an effort to diffuse tensions and dispel investor confusion around FUD (fear, uncertainty, and doubt). They stress that the market can withstand the strain and the effects won’t be as bad as anticipated, even if a sizable portion of creditors sell their coins.

Renowned cryptocurrency trader Ash Crypto provided a detailed explanation of this on his X (formerly Twitter) account. According to him, the present Bitcoin meltdown is the consequence of an overestimation of the Mt. Gox sell-off, with some people expecting a further drop to $40,000 or $45,000. His study indicates that Mt. Gox will pay out Bitcoin in three stages: payments made in July and October for early access, payments made in stages to final debtors, and final payments made years thereafter.

Market Resilience and Future Outlook

The early payments, totaling 71,403 BTC, would go to a variety of investors, including credit funds, private debtors, and cryptocurrency exchanges, Ash Crypto emphasized. He emphasized that since the market is now in a bull market, the impact of selling will be minimal. He also said that because of the modest inflows into ETFs, the market can withstand sell pressure of between 6,000 and 10,000 BTC. Nonetheless, the market can tolerate up to 15K–25K of daily BTC sell pressure during periods of strong ETF inflows.

His analysis suggests that the market won’t be as badly affected by a sell-off of 35,700 BTC as many people are afraid. In the end, he thinks that the price of Bitcoin would find support between $44,000 and $52,000 and that the price could only drop below that range in the event of a major global calamity like a war or epidemic. As of this writing, the price of Bitcoin is $54,123, down 5.94% from the previous day.

Conclusion

Undoubtedly, the enormous Bitcoin transfer by Mt. Gox sparked investor speculative activity and raised concerns in the market. Analysts claim that the market is prepared to withstand the selling pressure brought on by creditor repayments. The focus is still on keeping an eye on Bitcoin’s overall resilience and support levels as the market navigates this period of uncertainty, particularly in the event of large liquidation events.

Image by Daniel Dan outsideclick from Pixabay

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

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