Mt. Gox wallet awakens after 5 years with $7 billion transfer

The defunct Bitcoin (BTC) exchange Mt. Gox has re-emerged by transferring over 107,000 BTC, currently valued at approximately $7 billion. The funds were sent from its wallets to an unknown address in thirteen transactions and marks the first movement of assets from Mt. Gox’s cold wallets in over five years. The transactions included a test transaction worth $3 on May 20 and another smaller transaction of $160 on Tuesday, with the rest ranging from $1.2 million to $2.2 billion worth of Bitcoin.

A lesson in security

Mt. Gox was a Tokyo based exchange that operated from 2010 to 2014. It became the world’s largest Bitcoin exchange, handling over 70% of all BTC transactions at its peak. However, it collapsed in 2014 after losing approximately 850,000 Bitcoins due to a hack, leading to its bankruptcy and significant financial losses for its users. The event was a hard lesson for the upcoming industry, highlighting the need for better security and regulatory oversight in the cryptocurrency industry.

Potential selling pressure

The transaction by Mt. Gox was likely part of a plan to repay its creditors. After the exchange’s collapse in 2014 due to a massive hack, creditors have been awaiting the return of their lost assets. The recent transfer of Bitcoin is considered a step towards distributing these assets back to the creditors, with a repayment deadline set for October 31, 2024.

The move by Mt. Gox has made investors wary, as some creditors may choose to sell their Bitcoin immediately upon receiving it. Given the substantial amount of Bitcoin being distributed (107,000 BTC), even a fraction of creditors selling their holdings could introduce significant supply to the market. However, Alex Thorn from the financial services and investment management firm Galaxy expects most of the transferred Bitcoin to be held by creditors rather than sold immediately.

As of now, the impact on Bitcoin’s price has been relatively minimal. The market reacted with a slight bearish movement, causing the price to drop by 1.5%, from over $70,000 to its current value of $67,500. Despite the significant transfer of 107,000 BTC, the price decline has been modest, suggesting that the market has absorbed the news without substantial panic selling.


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