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The beleaguered exchange, once the dominant force in Bitcoin trading, has been gradually liquidating its remaining assets as part of a lengthy repayment plan to creditors. The latest move, involving the transfer of 13,265 BTC, with a value of $784 million to a new address, comes on the heels of a similar $2 billion transfer last week.
Arkham data shows that 12,000 BTC were sent to a new address (“1PuQB…nWhTb” ) on Tuesday and the remainder was directed to a known Mt. Gox cold wallet.
Bitcoin and Ethereum had been gaining momentum since last Friday but most gains were erased yesterday as both cryptocurrencies tumbled under increasing selling pressure. Bitcoin, which pushed toward $61,500, dropped back to $59,000 while Ethereum dropped from $2,700 to just under $2,600.
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The move follows Mt. Gox's $2 billion worth of Bitcoin move last week to a wallet belonging to the crypto custody platform BitGo, which is the last of the five service providers tasked with distributing tokens to creditors.
While the smaller size of this transfer compared to previous ones might suggest less market impact, it's important to note that the overall selling pressure from Mt. Gox's liquidation is significant. The exchange still holds a substantial amount of Bitcoin, and its continued offloading of these assets could further weigh on the market.
The timing of these transfers is particularly noteworthy, coinciding with a period of growing bearish sentiment in the cryptocurrency market. As investors grapple with concerns about macroeconomic factors and the potential for further price corrections, the added selling pressure from Mt. Gox has exacerbated the downward trend.
Mt. Gox, which derived its name from "Magic: The Gathering Online EXchange" as it began as a trading platform for the collectible card game, was responsible for over 70% of Bitcoin transactions back in 2014. That year, the platform suffered a hack in which it lost 850,000 BTC.
Creditors began receiving repayments a decade later in July 2024 through Kraken and Bitstamp. A few days later, Mt. Gox shifted another $$2.19 billion of Bitcoin to address bc1q26. Mt. Gox addresses currently hold 46,000 BTC, down from 141,000 BTC.
As the Mt. Gox repayment process unfolds, it's likely that the market will gradually adjust to the selling pressure. While the exchange's actions may create temporary volatility, the overall trajectory of the cryptocurrency market remains tied to broader macroeconomic factors and technological developments.
"While a small setback happened yesterday, it does not change the solid fundamentals that will push prices up as the cycle is expected to accelerate over the next 40 days," BRN lead analyst Valentin Fournier said.
Yesterday, the liquidation pressure favored the bears, with more long positions getting squeezed than short positions. Today, the situation reversed with the shorts being squeezed now twice as large as the original short positions ($1.2 billion before $61,000). While this shows confidence from the bears, it also makes a potential reversal more likely to gain momentum," Fournier added.
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