Why did Mentougou transfer out 140,000 bitcoins?

Author: BlockBeats

Today, the account address of the bankrupt exchange Mt. Gox suddenly showed a large transfer record after ten years. In the following six hours, Mt. Gox transferred a total of 141,685 bitcoins in 10 transactions, with individual amounts ranging from 200 million to 2.3 billion dollars, valued at approximately 9.8 billion dollars.

This is the first movement from Mt. Gox's cold wallet address in five years, and the transfer of nearly 140,000 bitcoins worth close to 10 billion dollars has attracted significant attention from the community. In comparison, the total increase in the number of bitcoins from today's Bitcoin ETF is 3,028, while major Wall Street ETF giants like BlackRock and Grayscale hold approximately 20 billion dollars in total bitcoin assets. The number of bitcoins transferred from the Mt. Gox address today accounts for nearly half of the bitcoin holdings of BlackRock and Grayscale.

This massive transfer indicates that one of the most important news events in crypto history, the Mt. Gox theft and bankruptcy incident, is nearing its conclusion, with the compensation process that has lasted for 10 years reaching its final step.

As early as January this year, dForce founder Mindao released an email received as a creditor of Mt. Gox on Twitter. In the email, Mt. Gox confirmed the ownership of the exchange address account entered by users as a BTC/BCH receiving address and stated that "200,000 bitcoins will be unlocked in the next two months for creditor payments." According to the latest balance sheet at that time, the exact number of bitcoins to be unlocked by Mt. Gox in the next two months will be 141,000.

BlockBeats interviewed Mindao regarding the transfer of 141,000 bitcoins from Mt. Gox this morning. He stated, "At the beginning of this year, creditors had already registered their receiving addresses, and they will receive tokens on exchanges like Kraken later. This (large transfer) should be Mt. Gox preparing for bitcoin distribution."

Will 140,000 Bitcoins Cause a "Mt. Gox Pit"?

Regarding this transaction, some community members' first reaction was panic.

Some community members pointed out the timing of bitcoin sales by Mt. Gox's liquidation lawyer, Nobuaki Kobayashi, who sold 35,800 bitcoins through over-the-counter transactions from December 2017 to February 2018 to repay user losses, and sold at high points during that time. Combined with the recent market's fatigue from rising, many believe that the market may experience a downward trend as a result. This morning, after breaking through 70,000 dollars, bitcoin turned to decline, with a drop of over 3%.

After the settlement of 140,000 bitcoins, will there really be significant selling pressure? Regarding this event itself, the market generally believes that "there will be some impact, but it shouldn't be too large."

In the repayment plan provided by Mt. Gox to creditors, the repayment amount includes a "basic repayment" part and a "proportional repayment" part, where the basic repayment amount is uniform, and the proportional repayment part can choose "mid-term repayment and final repayment" or "early one-time total repayment." Mt. Gox has not disclosed the specific details of the subsequent situation, meaning that creditors will not receive all compensation assets in one go.

Mindao stated, "Because most creditors have already sold their money to those funds, this part of the selling pressure has long been hedged. And those of us who have held on until the end definitely won't sell at this time."

Looking back over the years, the panic surrounding Mt. Gox has become a "must-learn lesson for retail investors," "scaring people every year." Since Mt. Gox was ordered to compensate creditors with 140,000 bitcoins in 2019, the "Mt. Gox incident" has become a ticking time bomb for negative sentiment, with the "wolf is coming" story repeatedly playing out, stimulating market emotions.

Despite the fact that institutional investors have gradually become the main force in today's cryptocurrency market with the approval of bitcoin ETFs, the impact of 140,000 bitcoins on the trading market will gradually diminish. Excluding the impact of significant selling pressure, some voices believe that the volatility brought by fear sentiment will be greater.

Crypto KOL Ryu Xiao Chu stated on Twitter, "Many people compare it to Grayscale and think it won't affect the market. I don't agree… If compensation occurs, the market will definitely react… Panic often lasts for a while. The real situation is that the selling pressure is not as great as imagined, so it will be a good opportunity to buy the dip."

According to a previous announcement from Mt. Gox, the debt repayment period for these 140,000 bitcoins is set for October 31, 2024.

Reflecting on the "Crypto Earthquake" from 10 Years Ago

The Mt. Gox bankruptcy incident is one of the most famous events in cryptocurrency history. Mt. Gox was originally created in 2010 and at its peak accounted for over 90% of bitcoin trading.

In 2011, Mt. Gox was first hacked, resulting in thousands of bitcoins being stolen. By 2014, Mt. Gox suddenly announced that approximately 850,000 bitcoins (worth about 450 million dollars at the time) were stolen from the platform and subsequently suspended all trading, filing for bankruptcy protection. This incident caused a "earthquake" in the crypto market, with the price of bitcoin plummeting from a high of 951 dollars that year to 309 dollars, a drop of 67%.

Since the declaration of bankruptcy and liquidation began, Mt. Gox has been in a prolonged tug-of-war with creditors for years. In the following years, the price of bitcoin continued to rise, reaching 19,000 dollars by 2019.

In 2019, the Tokyo District Court ruled that Mt. Gox should retrieve 141,000 bitcoins for trust custody and negotiate a voting process for all creditors to choose a repayment plan. According to Mt. Gox's balance sheet in 2019, its debtors held approximately 142,000 BTC, 143,000 BCH, and 69 billion yen (about 510 million dollars at that time).

However, the 140,000 bitcoins determined in 2019 had a maximum unit price of around 10,000 dollars, while two years later, the price of bitcoin broke through 60,000 dollars, causing the repayment process of Mt. Gox to be delayed repeatedly.

In 2022, Mt. Gox announced that its bitcoin repayment process had been accepted by the court. Mt. Gox creditor channel operator Django Bits stated that this repayment process could "last for months or even years."

If Mt. Gox does not "delay" this time, in five months, this decade-long bankruptcy saga involving 800,000 bitcoins will come to a complete end. Mt. Gox's return to the center of community attention has also sparked a wave of nostalgia among OGs. Ten years ago, when Mt. Gox announced the loss of 800,000 bitcoins, Ethereum was born during that time and gradually moved to the center of the crypto world. Ten years later, with the approval of bitcoin ETFs and Ethereum ETFs, the crypto space is moving towards the next stage.