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The defunct crypto exchange Mt. Gox isn’t done with its Bitcoin repayments to creditors, as on-chain data shows that the exchange recently moved a significant amount of BTC. This has raised the question of how much Bitcoin Mt. Gox has left, considering the negative impact these BTC repayments have had on the flagship crypto’s price action so far.
Mt. Gox’s $2 Billion BTC On The Move
The on-chain analytics platform Arkham Intelligence revealed in an X (formerly Twitter) post that a wallet (bc1q26) that had received $2.19 billion worth of Bitcoin from Mt. Gox had recently initiated test transactions. This development is significant as the wallet that received the 33,105 BTC ($2.19 billion) from Mt. Gox is believed to belong to Bitgo, the fifth and final exchange the trustee approved for the BTC repayments.
As such, Bitgo may be preparing to distribute these Bitcoins to creditors. Following the test transaction, Bitgo moved Mt. Gox’s $2 billion BTC to another wallet (bc1qpn5), which could be a security precaution before they begin repayments to creditors. These Bitcoin transfers are also believed to be related to creditor repayments because some users on a Mt. Gox Reddit channel recently claimed they received BTC in their Bitgo account.
Mt. Gox’s Bitcoin repayments began last month, spreading panic through the crypto market as BTC dropped to as low as $54,000. These BTC distributions raised concerns that Mt. Gox creditors may sell off their BTC once received, which would put significant selling pressure on the flagship crypto.
However, the on-chain analytics platform Cryptoquant revealed that these Mt. Gox creditors chose to hold rather than offload their BTC holdings. Cryptoquant cited a spike in withdrawals from Kraken following the Mt. Gox Bitcoin repayments through the exchange, which suggests that these creditors were moving their coins to cold wallets.
This explains why Bitcoin remained steady despite the recent Mt. Gox BTC transfers. However, the defunct crypto exchange still holds 46,164 BTC ($2.81 billion), which could still significantly impact the market depending on whether other creditors choose to hold.
Bitcoin Awaits Critical Inflation Report
Bitcoin has continued to trade sideways as investors await the July Consumer Price Index (CPI) inflation report, which will be released on August 14. A positive inflation reading would strengthen the case for the US Federal Reserve to cut rates in September, boosting investors’ confidence in risk assets like Bitcoin and other cryptocurrencies.
The July Producer Price Index (PPI) inflation report, released on August 13, was positive, coming in lower than expectations. As such, a positive CPI inflation report might be all the confirmation that the Fed needs that inflation has indeed slowed and that now is the perfect time for the rate cuts. Following the August 5 Bitcoin crash, Bernstein analysts predicted that Bitcon’s price would turn bullish again when the Fed cuts interest rates.
Featured image created with Dall.E, chart from Tradingview.com
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