Bitcoin fell by 3.1% as traders monitored transfers from wallets belonging to the failed Mt. Gox exchange. The exchange, which was once the world’s largest Bitcoin exchange, was hacked in 2011 and went bankrupt in 2014. Administrators of Mt. Gox have been stepping up efforts to return over $9 billion worth of Bitcoin to creditors. The movement of over 137,000 Bitcoin from Mt. Gox wallets on Tuesday caused the original cryptocurrency to drop to around $67,850. This led to a ripple effect that also affected smaller coins like Ether.
The trustee of Mt. Gox has stated that creditors should expect base, intermediate, and early lump-sum payments by October 31 as part of the winding-up process. One key concern is whether those receiving the tokens will sell, potentially putting pressure on Bitcoin’s price. The movements in Mt. Gox wallets on Tuesday were the first since May 2018, with the fallen platform previously holding about 137,892 Bitcoin. Other assets such as Bitcoin Cash and fiat money were also held by the exchange, with some fiat money already being returned. Bitcoin Cash saw a 5% drop on Tuesday in response to the wallet movements.
Despite the impact on Bitcoin’s price from the Mt. Gox transfers, some experts like Caroline Bowler, CEO of BTC Markets, believe that the movements are not overly concerning and will only have a short-term impact. Bowler noted that the broader market is more focused on the bipartisan support for crypto-friendly regulations coming from US lawmakers. Bitcoin has seen a resurgence after a deep bear market in 2022, quadrupling in value since the start of last year. The launch of spot-Bitcoin exchange-traded funds in January also contributed to the token’s recovery, reaching a record high of $73,798 in mid-March.
US prosecutors last year accused two Russian nationals of conspiring with others to break into Mt. Gox’s servers, leading to the exchange’s hacking and subsequent bankruptcy. Efforts to return funds to creditors have been ongoing, with the recent movements in Mt. Gox wallets marking a significant development in the process. While the Mt. Gox transfers have caused a short-term dip in Bitcoin’s price, the broader market sentiment remains positive due to regulatory support and the overall recovery of the cryptocurrency market. The impact of the Mt. Gox transfers on Bitcoin’s price is expected to be temporary, with the focus shifting towards other factors driving the market.
