The MtGox wallet moved out 47,229 $BTC worth around $2.71B at the time of the incident. The defunct crypto exchange is likely making the large transfer to fulfill its July repayment commitment.
The recent movement of funds from the Mt. Gox wallet triggered a market downturn, causing Bitcoin’s price to decline by approximately 5-7% after the transfer. The price of Bitcoin is currently set at $54k.
The market correction led to liquidations in the derivative markets, particularly in futures and options contracts. Data on Coinglass showed that the total crypto liquidation in the last 24 hours is $683.04M, while long and short positions record $590.23M and $92.81M, respectively, at press time.
Is The Worst Really Over?
In a recent report, crypto intelligence platform Santiment predicted a market rebound after looking at the June crypto report. The increased selling pressure caused Bitcoin to dip almost 7% in June, even hitting a monthly low of $59,499 on June 24.
As sellers lost steam and selling pressure decreased, the crypto intelligence platform predicted a potential market rally.
The report’s conclusion highlighted the potential for the Mt. Gox repayment plan to trigger a subsequent market sell-off, which was subsequently realized after the defunct exchange’s massive wallet movement.
MtGox Consistent Influence on the Crypto Market
Before its bankruptcy, Mt. Gox handled around 70% of all Bitcoin transactions and executed about 150,000 transactions daily. After the company announced its plans to file for bankruptcy in February 2014, the price of Bitcoin fell from over $600 to around $100 in just a few seconds.
Five years later, the defunct exchange transferred over 140,000 bitcoins (BTC), worth about $9 billion at that time, to a new wallet. The transfer caused Bitcoin’s price to fall from $70,600 to $68,500. The crypto space speculated the wallet movement as part of Mt. Gox’s plan to repay its debts.
In June, the crypto exchange, through Rehabilitation trustee Nobuaki Kobayashi, announced its plan to start repaying investors in July. The repayment notice also caused Bitcoin to drop from $63k to $61k.
As Mt. Gox continues to cause a ripple in the market, what will happen as the insolvent exchange sets its debt repayment plan in motion?
