Bitcoin Plunges 2% On Selling Pressure Concerns As Mt. Gox Wallets Transfer $7.2 Billion BTC Ahead Of Creditor Payments

Updated: 28 May 2024

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Bitcoin plunged 2% as wallets belonging to the defunct crypto exchange giant Mt. Gox transferred more than 107k Bitcoin (BTC) to an unknown wallet address earlier today.

The series of transfers, valued at over $7.2 billion, come as the crypto exchange prepares to return BTC holdings to creditors before the end of October this year.

BTC Plunges Below $70K

BTC slid 2% to a low of $67,450.99 on the news over the past 24 hours on concerns the transfers will create selling pressure. It has since recovered slightly to trade at $67,881 as of 3:05 a.m. EST.

Over $9.4 billion in BTC and $72 million in BCH is owed to Mt. Gox’s 127,000 creditors. In addition, Japanese yen worth approximately $445.8 million will be paid out as well.

K33 Research predicted in an Apr. 23 note that the exchange’s payouts to creditors could “spook the market” and exert selling pressure on the largest crypto by market cap.

“Mt. Gox coins could become a relevant negative price contributor in the next weeks,” K33 Research analysts Anders Helseth and Vetle Lunde wrote in the note.

Alex Thorn, the head of research at Galaxy, tracked the movements on X. He believes that most of the BTC that will be paid out to creditors later this year might not be sold off immediately. However, he is not as confident that creditors will hold on to their Bitcoin Cash (BCH) payouts.

Funds Leave Mt. Gox Cold Wallet For The First Time In Five Years

On-chain data shows that the BTC was moved through thirteen transactions. Two test transactions of $3 and $160 were performed on May 20 and earlier today, respectively. Thereafter, the remaining transfers ranged from $1.2 million to $2.2 billion worth of the leading crypto.

The recent transfers marked the first time in more than five years that funds have been moved out of Mt. Gox’s cold wallets. All of the BTC was sent to the address labeled 1JbezDVd9VsK9o1Ga9UqLydeuEvhKLAPs6, according to CryptoQuant head of research Julio Moreno.

Outflows from Mt. Gox addresses continue:

Now a total of 42,829 Bitcoin have moved out from Mt. Gox addresses in the last few hours.

All coins have been transferred to a new address: 1JbezDVd9VsK9o1Ga9UqLydeuEvhKLAPs6 pic.twitter.com/s19TtkMP3i

— Julio Moreno (@jjcmoreno) May 28, 2024