Bitcoin Crashes to $54k as Mt. Gox Moves 47,000 BTC From Cold Wallet to New Address

Defunct cryptocurrency exchange Mt.Gox has transferred 47,228 BTC to a new wallet address, triggering a market panic that has pulled Bitcoin back to trading at prices last seen in February.

According to Arkham Intelligence, the coins, worth around $2.7 billion, were transferred from a cold wallet. This is the first major move of the exchange’s funds since May.

This transfer could indicate that the Mt. Gox Rehabilitation Trustee is ready to reimburse creditors. Last month, the trustee confirmed that the repayment preparations were now final, and creditors are expected to start receiving their funds in early July.

The reimbursements come after nearly a decade following the exchange’s collapse in 2014. The exchange plans to distribute $9 billion of Bitcoin to these creditors by October 2024. The distributed funds will include 142,000 Bitcoin, 143,000 Bitcoin Cash, and 69 billion yen. 

The market expects that this distribution will affect Bitcoin prices if the creditors decide to sell. The ongoing “fear, uncertainty, and doubt” FUD has seen the global cryptocurrency market cap plunge by nearly 9%.

Bitcoin Drops to $54K on Mt.Gox Selling Fears

The cryptocurrency market is currently fearful as traders brace for the possible dumping of Bitcoin into the market by Mt.Gox creditors.

Bitcoin has fallen 7% in the last 24 hours, trading at $54,151 at the time of writing. The coin is now at a four-month low.

According to Coinglass, crypto liquidations have topped $682 million in the last 24 hours. On-chain data shows that this was the second-largest liquidation event in Bitcoin’s history, with the largest one being in November 2022, when the FTX exchange collapsed.

Market intelligence platform Santiment also notes that the crypto industry exhibited “historic levels of FUD,” with more people selling than buying.

Despite the negative sentiment, some traders use the price dip to accumulate more Bitcoin. Renowned market analyst “PlanB” believes that despite the concerns around selling activities by Mt. Gox and the German government, nothing in Bitcoin’s price movement shows structural weakness that undermines price stability.

Another analyst on X, “@CryptoMichNL,” also believes the recent crash has resulted in a capitulation event. Once the selling pressure subsides and buyers enter the market again, a stable market and price recovery usually follow capitulation events.

Galaxy Digital’s Head of Research, Alex Thorn, also shared a bullish take, saying the individual Mt. Gox creditors were “diamond-handed” and thus less likely to sell.