After five years of silence, a large transfer from the Mt. Gox address: will 140,000 BTC crash the market?

Author: Nan Zhi, Odaily Planet Daily

Yesterday morning, addresses related to Mt.Gox, which had been silent for 5 years, began to transfer large amounts of Bitcoin continuously, ranging from thousands to tens of thousands of coins. Currently, Mt.Gox holds 141,680 BTC, worth nearly $10 billion, raising concerns in the market about potential selling pressure, with BTC dropping from a price of 69,400 USDT at 9 AM yesterday to a low of 67,500 USDT.

The Mt.Gox incident is finally approaching its conclusion. What impact will it have on the market? Odaily will analyze this in this article.

Details of the Compensation Plan

First, the question most concerning to users: Is the transfer of tokens by Mt.Gox after many years for the purpose of selling?

Documents released by Mt.Gox indicate that this batch of transfers is to prepare for the repayment deadline for creditors on October 31. According to their documents, the Rehabilitation Trustee is preparing for the repayment of the claims related to the distribution of cryptocurrency. There are two compensation plans: Plan A is to repay creditors in BTC and BCH on designated exchanges, while Plan B is to sell the tokens and then repay. According to Cointelegraph, as of now, the Rehabilitation Trustee has not clarified which plan will be used for compensation.

Previously, on April 21, a Reddit user reported that Mt.Gox claimants found that the claim form had been updated to include fields such as the expected number of tokens to be retrieved, displaying BCH and BTC codes. Earlier this year, in January, some creditors received emails asking them to confirm their account information and warning that if their accounts were disabled or frozen in the future, they might not receive BTC/BCH repayments. This indicates that Mt.Gox is at least moving towards some form of BTC payment, rather than solely focusing on fiat currency payments, but most users believe that the updated form has no connection to the payment of compensation.

From this, it can be concluded that BTC does indeed face selling pressure risks from Mt.Gox, but whether this plan will be chosen and the specific selling ratio remain unknown.

How Strong is the Selling Pressure?

The total amount of BTC transferred by Mt.Gox is 141,680 coins, directed to multiple addresses. Users can check the details in Odaily's report, but the total selling volume, as mentioned in the previous section, is currently unknown. Alex Thorn, head of research at Galaxy Digital, stated: "Personally, I expect that most of the Bitcoin will be held, but I cannot say the same for BCH. Not all tokens will be sold."

Regarding the timing of the sale, former Mt.Gox CEO Mark Karpelès posted on the X platform: "As far as I know, everything is normal at Mt.Gox. The trustee is transferring tokens to another wallet in preparation for the distribution that may occur this year, and there will not be an immediate sale of Bitcoin." The official final repayment deadline is October 31, 2024, which is still a long way off.

Additionally, regarding the details of the sale, according to Mt.Gox's official announcement in January 2023, the repayment plan provided by Mt.Gox is divided into two categories: "Base Repayment" and "Proportional Repayment." The base repayment amount is consistent, while the proportional repayment offers creditors two options: "mid-term repayment and final repayment" or "early lump-sum repayment." In other words, if they choose to sell the tokens, it does not mean a rapid sale in a short time; it can be understood as another form of GBTC selling pressure, which will be sold in batches over a longer period.

Conclusion

In summary, we can conclude that the token transfer actions of Mt.Gox represent a potential possibility of token selling pressure to some extent, but the final decision on the plan remains undecided. Even if a selling plan is chosen, it will be digested over a longer period, making it unlikely to cause a direct market crash.