Bitcoin Recovers Despite Mt. Gox Trustee Remitting $2.8B to Cold Wallet

Bitcoin recovered from the dive below $65,000 as the Mt. Gox trustee transferred BTC to a cold storage wallet. Is distribution imminent?

Bitcoin tumbled 1.4% on the news of Mt. Gox trustee executing a Bitcoin transfer valued at $2.8B after a test transaction on Tuesday morning. Blockchain analytics firm Arkham Intelligence confirms 44,526.95 BTC movement to a cold wallet.  

For clarity, the transaction appears as the Mt. Gox trustee shifted the funds to another wallet. The transaction was enough to leave the Bitcoin investors feeling spooked.

The Bitcoin took a minor correction to $62,968, though it regained the uptrend at 07:34 PM UTC exchange hands at $64,966.22, CoinGecko shows. Despite witnessing swings in the past 24 hours, Bitcoin still portrays enhanced recovery from the dip to test the day high at $65,235.73. 

Notably, the drop is yet to erase the gains realized over the weekend as Bitcoin led the altcoins to escape the week-long bloodbath. CoinGecko data shows the lead crypto is up 12.5% in the last seven days.

Blockchain data on Mt.Gox cold wallet that was last involved in a transaction two weeks ago is holding $3 billion. However, the cold wallet only has a portion of the nearly $9 billion worth of Bitcoin the trustee intended to repay ex-clients. 

Bitstamp and Kraken Confirm Mt. Gox Distribution

The trustee of the defunct crypto exchange is handling the repayments assisted by five crypto exchanges. Robinhood-owned Bitstamp assured us they would begin the distributions to the creditors last week. 

Mt.Gox trustees agreed with Bitstamp to distribute Bitcoin (BTC) and Bitcoin Cash(BCH)  within 60 days. Bitstamp acknowledges the responsibility to ensure the ex-clients are made whole. 

Mt. Gox’s repayments end the decade-long wait to redistribute the tokens to the creditors since it plunged into bankruptcy. 

Crypto exchange Kraken joins Bitstamp in confessing engagement with the Mt. Gox trustee to distribute the BTC and BCH to the defunct exchange’s creditors.

Kraken admitted the email making the rounds on X (formerly Twitter) is a legitimate notification. Nonetheless, Kraken was noncommittal on whether the distribution would match the coordinating exchanges. 

Kraken owned the email notification asking the beneficiaries to anticipate the funds in 7-14 days. 

Mt. Gox once ranked the largest Bitcoin exchange for the Tokyo-headquartered entity, accounting for 70% of BTC trading volume in 2013. In particular, Mt. Gox chief executive Mark Karpeles confessed the embattled exchange handled $5 – $20M inflows. 

The platform, unveiled in 2010, serves as a destination for swapping physical Magic: The Gathering playing cards. Mt. Gox represents the acronym of Magic: The Gathering Online Exchange would shift towards good when it started supporting cash for BTC. 

Mt. Gox’s preparation to return Bitcoins valued at billions, though beneficial to the users, is prompting concern across the crypto space. The concerns emerge from market participants’ prediction that most creditors will sell the refunded Bitcoin. 

Market to Absorb Mt.Gox Repayments

Analysts welcoming the repayments consider the market is in the right position to absorb the selling pressure posed by Mt. Gox creditors. The OKX chief commercial executive Lennix Lai considers the threat of Mt. Gox creditors dumping to be overestimated. The executive considers the majority of the creditors to be long-term Bitcoin enthusiasts and unlikely to dispose of the Bitcoins immediately. 

Lai cites the German government’s spell to sell off the seized Bitcoin, which caused a significant impact across the market. However, by Friday afternoon, the government had run out of Bitcoin. 

Meanwhile, Bitcoin regained its bullish steam on Monday to jump above $64,000. The uptrend sent the share price of affiliated stocks, such as Coinbase (COIN) and MicroStrategy (MSTR), to surge as traders leveraged the shifting tailwinds. 

The largest global crypto by market value has been up 2.5% in the past 24 hours, and it has been exchanged at $64,966.22, reversing the losses witnessed since the end of June over Germany’s dumping, CoinGecko data shows. 

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