Markets React as Mt. Gox Moves $9 Billion in Bitcoin in Three Hours

Cryptocurrency players are on edge as some tokens plunge in value after $9 billion worth of Bitcoin was transferred from Mt. Gox wallets in just a few hours.

On July 16, data from cryptocurrency analytics firm Arkham Intelligence showed that within 3 hours, Bitcoin ( BTC) worth more than $9 billion from the wallet address of the Mt. Gox exchange was transferred to a cold wallet and two unknown wallets.

Cointelegraph said the market reacted immediately to the situation. Bitcoin's price fell from $65,000 at the beginning of the day to $63,000, dragging altcoins like Uniswap's UNI, Polkadot's DOT, and Bitcoin Cash's BCH down. "An hour after the first Mt. Gox transaction, market sentiment turned bearish, and BTC prices began to decline. After money continued to flow into unknown wallets, market sentiment worsened," the site said.

Meanwhile, Coinpaper commented that most activities related to Mt. Gox have negatively impacted the price of Bitcoin in particular and cryptocurrencies in general. Many people are concerned that the huge amount of Bitcoin transferred to the market could cause an imbalance in supply and demand, triggering a sell-off when the general psychology of the community is affected.

Illustration of how Mt. Gox's return could have a major impact on Bitcoin's price. Source: Cointelegraph

"While Mt. Gox creditors are smiling as they are about to receive their repayment, Bitcoin holders are worried," Coinpaper commented. Cryptocurrency market analyst Quinten Francois said that the anxiety related to Gt. Gox's moves has prevented Bitcoin from breaking through the resistance level of $65,000. The last time BTC reached this price was on June 21.

Mt. Gox was a Tokyo-based cryptocurrency exchange that operated from 2010 to 2014. During this time, Mt. Gox became one of the most popular and well-known platforms, handling over 70% of the world's Bitcoin transactions.

In 2011, hackers found a vulnerability and stole hundreds of thousands of Bitcoins from the exchange, leading to its collapse in February 2014. The company later recovered 200,000 BTC, but that was not enough to make up for the losses after the attacks. After Mt. Gox declared bankruptcy, Bitcoin plummeted from $1,000 per token to $600.

After nearly a decade of fighting, CoinLab reached a deal in January 2021 with Mt. Gox bankruptcy trustee Nobuaki Kobayashi to return funds to users. He is believed to be holding 142,000 Bitcoins, currently worth about $8 billion. The Bitcoins were originally scheduled to be returned in October 2024, but the process is moving forward.

“A lot of people who had assets stuck in the Mt. Gox bankruptcy are obviously going to cash out,” John Glover, chief investment officer at crypto lender Ledn, told CNBC . “After what happened, they chose to cash out (when they got their Bitcoin back) and run away from the market.”

"While it's good news for Mt. Gox victims, the inevitable sell-off is understandable, and it's understandable that the already volatile market for cryptocurrencies will continue to create anxiety," said James Butterfill, head of research at CoinShares.