Recent on-chain fund movements suggest that Mt. Gox is wrapping up arrangements to reimburse its creditors using the Bitstamp bitcoin market. According to blockchain intelligence company Arkham Intelligence, the Mt. Gox-related address has started sending initial test transactions to Bitstamp’s cold wallets. A post on X from July 22nd highlighted this development.
“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… These transfers are likely to represent test transactions.”
Potential Sell Pressure and Creditor Behavior
Over $9.4 billion in Bitcoin is owed to over 127,000 creditors who have been waiting more than ten years to get their money back. These creditors are involved in the payback procedure. Investors in cryptocurrency are becoming increasingly concerned about the potential sell pressure that these repayments could have on the price of Bitcoin. At $66,945, Bitcoin price may see pressure if a sizable portion of Mt. Gox debtors choose to liquidate.
Given that the price of Bitcoin has increased by over 8,500% since the collapse of the exchange, the majority of creditors are probably going to sell. According to a July 4 article on X by finance researcher Jacob King, up to 99% of creditors may decide to liquidate their Bitcoin.
“99% of those on Mt. Gox are going to sell their coins the moment they get it. Imagine billions worth of Bitcoin all being dumped gradually over the next several weeks. There is no way to spin this to be bullish, or news that could offset this.”
On the other hand, a Reddit community poll presents an alternative scenario: Of the creditors of Mt. Gox, 56% want to keep their Bitcoin, while only roughly 20% want to sell it.
More than 36% of the Bitcoin owing to creditors of Mt. Gox had already been disbursed as of July 17. Large Bitcoin holders, or “whales,” have persisted in purchasing despite worries about selling pressure. A well-known whale bought 245 BTC on July 17 for around $16 million. Despite only having exchanged Bitcoin twice in the last year, this address has profited nearly $30 million from those transactions.
Final Preparations for Repayments
According to data from Arkham Intelligence, the Mt. Gox wallet presently contains about 90,300 Bitcoin, valued at over $6.12 billion. The completion of test transactions implies that Mt. Gox is finalizing its arrangements for paying back creditors using Bitstamp, even though the precise time for the repayments to resume is still unknown.
Image by Gerd Altmann from Pixabay
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