According to recent on-chain movements, Mt. Gox is preparing to repay creditors via the Bitstamp cryptocurrency exchange. The address associated with Mt. Gox conducted initial test transactions to Bitstamp cold wallets. These test transactions were flagged in a July 22 post by blockchain intelligence firm Arkham Intelligence.
What’s Happening on the Mt. Gox Front?
One to four separate Bitstamp deposit addresses were deposited into Mt. Gox addresses. Bitstamp is one of the five exchanges working with the Mt. Gox Trustee to facilitate creditor repayments, and these transfers likely represent test transactions.
Approximately 127,000 Mt. Gox creditors, who have been waiting over a decade to recover Bitcoin funds worth more than $9.4 billion, have been anticipating this process. However, some crypto investors are concerned about the potential selling pressure from Mt. Gox repayments, which could exert downward pressure on Bitcoin prices.
Most of Mt. Gox’s creditors might consider selling their Bitcoin, which has increased in value by over 8,500% since the exchange’s bankruptcy. According to financial analyst Jacob King, about 99% of creditors might plan to sell their assets from the bankrupt exchange, and he stated in a July 4 post:
“99% of those at Mt. Gox will sell as soon as they get their money. Imagine billions of dollars worth of Bitcoin being gradually unloaded over the next few weeks. There’s no way to spin this as bullish or balance it with any news.”
Details on the Matter
A Reddit community survey shows that 56% of Mt. Gox creditors plan to continue holding their Bitcoin, while only 20% of respondents signaled an intention to sell. As of July 17, more than 36% of the Bitcoin owed to Mt. Gox creditors had already been distributed, but large Bitcoin holders, known as whales, continued without succumbing to a buying frenzy.
An informed whale, unaffected by potential selling pressure, purchased 245 Bitcoin worth approximately $16 million on July 17. The address had only made two Bitcoin transactions in the past year, earning over $30 million in profit from those transactions.
According to Arkham Intelligence data, the Mt. Gox-labeled wallet currently holds more than 90,300 Bitcoin worth $6.12 billion.
It is unclear when Mt. Gox will resume repayments, but today’s test transactions indicate that these are the final preparations before creditors are repaid via Bitstamp.
