Bitcoin Price Slips 2% Amidst Large Mt. Gox Wallet Transfer

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The price of Bitcoin (BTC) took a tumble on May 28th, dropping roughly 2% following a series of large transactions from wallets associated with the defunct cryptocurrency exchange Mt. Gox. These transactions, totaling over 107,000 BTC (worth nearly $7.3 billion at the time), moved funds to an unknown wallet, raising questions and sparking concerns within the crypto market.

Blockchain analysis firm Whale Alert first reported the activity on May 28th, highlighting six separate on-chain transactions ranging from 3,999 BTC to 32,499 BTC occurring within a few hours of each other. Further investigation by blockchain explorer Arkham Intelligence revealed that the transactions originated from multiple Mt. Gox cold wallets, with most transfers consisting of 2,000 BTC each. All the transactions ultimately led to a single, unidentified address currently holding over 107,547 BTC, valued at approximately $7.29 billion at the time of writing.

Efforts to reach Mt. Gox’s trustee firm, Nagashima Ohno and Tsunematsu, for clarification regarding the purpose and destination of these transferred funds have not yet yielded a response.

The market reacted swiftly to the news, with Bitcoin’s price dropping from $69,374 at the time of the first transfer to its current price of $67,875 (as per CoinMarketCap data). This roughly 2% decline aligns with concerns expressed by analysts at K33 Research last month. They previously warned that the movement of Mt. Gox-era Bitcoin could potentially spook the market and exert downward pressure on the cryptocurrency’s price.

The situation is particularly sensitive given the long-awaited repayments owed to Mt. Gox’s creditors. Over $9.4 billion worth of Bitcoin is owed to roughly 127,000 creditors who have been waiting to reclaim their funds for over a decade, following the exchange’s collapse in 2014 due to a series of undetected hacks.

With a court-mandated deadline for repayments set for October 31st, 2024, Mt. Gox’s trustee firm began contacting creditors in January to verify their identities and establish exchange accounts for the upcoming payout. The recent large-scale wallet transfers, however, have cast a shadow of uncertainty over the repayment process and caused jitters within the cryptocurrency market.

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