The Bitcoin price experienced a 1.5% decline today, falling below the $68,000 mark after briefly peaking near $70,600 yesterday. This drop follows reports that Mt. Gox, the once-dominant Bitcoin exchange that collapsed in 2014, has begun processing payouts to its long-waiting creditors. The release of approximately 75,000 Bitcoins, valued at over $5.1 billion, has sparked concerns about potential market liquidity and price stability.
Alex Thorn, head of research at Galaxy, a leading cryptocurrency firm, provided real-time updates via X on the movements of Bitcoin related to the Mt. Gox payouts. Initially, Thorn reported the transfer of approximately 25,000 BTC. “About 25K BTC from Mt. Gox has moved in the last hour, likely the beginning of distributions to creditors. […] I expect most BTC gets hold, but I can’t say the same for the BCH,” Thorn commented, indicating a differentiated impact on Bitcoin versus Bitcoin Cash.
Shortly after, the movements escalated quickly. Thorn’s updates continued: “16.5K BTC just moved, totaling 42.9K BTC so far tonight ($2.9bn).” A subsequent large transfer was also noted: “Another 32.1k BTC just moved. Total is now 75k BTC so far tonight ($5.1bn). All moved to the 1Jbez…APs6 address. Maybe a consolidation before moving to the creditor custodians.
The potential market impact of these large Bitcoin movements has been a topic of much speculation. Matt Walsh, general partner at Castle Island VC, discussed the strategic purchases of Mt. Gox claims. “Lot of SPV capital buying claims with the intent on hodling the BTC (in-kind distribution mechanism). I agree with your take on the B-cash. Still, my back of the napkin math still has about 65K BTC set to be delivered to individual creditors,” Walsh stated.
Responding to Walsh, Thorn pointed out the speculative nature of these estimates. “Several assumptions in that number, though,” he noted, implying the difficulty in predicting exact market outcomes from these distributions.
The behavior of creditors receiving these payouts is also under scrutiny. X user Dickie Emerson argued against the assumption that most would hold onto their Bitcoin. “No clue why you think most BTC gets held. These were forced holders. They will get a major payday they would have likely not received had it never been locked (they would have sold by now),” Emerson stated.
As the market grapples with the implications of the Mt. Gox payouts, the distribution of such a significant amount of Bitcoin has introduced an element of uncertainty. While some believe that many of these coins will continue to be held, others argue that the long wait might prompt creditors to cash out, potentially leading to increased volatility in the Bitcoin market.
