Cryptocurrency players worried when $9 billion worth of Bitcoin from Mt. Gox was delivered in just a few hours.
On July 16, Arkham Intelligence said that in 3 hours, more than 9 billion USD worth of Bitcoin (BTC) from the wallet of Mt. Gox moved to one cold wallet and two unknown wallets.
Cointelegraph reported that the price of Bitcoin dropped from $65,000 to $63,000 after the event, leading to a decline in the prices of altcoins such as UNI, DOT, and BCH. “An hour after the first transaction of Mt. Gox, market sentiment became pessimistic, causing BTC prices to fall,” Cointelegraph said.
Coinpaper stated that most activities related to Mt. Gox all negatively impacted the price of Bitcoin and cryptocurrencies in general. Many people fear that transferring a large amount of Bitcoin to the market will cause an imbalance in supply and demand, triggering a sell-off as community sentiment is affected.
“While creditors of Mt. Gox is happy to receive a refund, Bitcoin owners are worried,” Coinpaper commented. Quinten Francois, a cryptocurrency market analyst, believes that this nervousness is keeping Bitcoin from overcoming the resistance level of $65,000, the price BTC last reached on June 21.
MT. Gox, a digital currency exchange in Tokyo, operated from 2010 to 2014, processing more than 70% of the world's Bitcoin transactions. In 2011, hackers stole hundreds of thousands of Bitcoins, leading to the collapse of the exchange in February 2014. The company got back 200,000 BTC but it was not enough to make up for the shortfall. After Mt. Gox declared bankruptcy, Bitcoin price dropped from $1,000 to $600 per token.
In January 2021, CoinLab reached an agreement with Nobuaki Kobayashi, the trustee of the Mt. Gox, to return money to users. Kobayashi currently holds 142,000 Bitcoin, worth about 8 billion USD. The expected refund date is October 2024, but the process is happening earlier.
“Many people have assets stuck in the Mt. Gox will cash out,” said John Glover, Chief Investment Officer of digital lending company Ledn. “They choose to sell for money when they are refunded Bitcoin and leave the market.”
“Although it is good news for creditors of Mt. Gox, the sell-off will cause concern in the already sensitive cryptocurrency market,” commented James Butterfill, head of research at CoinShares.