Mt. Gox Moved $2B $BTC to Suspected BitGo Wallet for Repayment

• A wallet tied to BitGo received over $2B $BTC at the end of July.
• After sitting dormant for two weeks, the wallet initiated a test exchange, likely in preparation for the next stage of Mt. Gox repayments.
• With 33,105 $BTC in the target wallet about to hit the market, the move caused market-wide speculation.

Did BitGo's 33,000 Bitcoin test transaction signal the final stage of the Mt. Gox saga?

Wallets connected to Mt. Gox creditors reactivated yesterday as the decade-long settlement of the exchange's collapse enters its final stages.

BREAKING: Bitgo has just moved $2B of Mt. Gox BTC. pic.twitter.com/3aPFPhmGGN

- Arkham (@ArkhamIntel) August 13, 2024

Despite the prospect of over 33,000 $BTC hitting the market, investors appeared unfazed, and $BTC's price actually increased by 3%.

Let's look a bit closer to learn why Mt. Gox moved $2B $BTC to a BitGo wallet and what this means for the broader market.

The Ongoing Legacy of the Mt. Gox HackMt. Gox, once the largest Bitcoin exchange, handled over 70% of global Bitcoin transactions before a massive hack led to its collapse in 2014.

Hackers stole ~850,000 Bitcoin, valued at ~$450M at the time. Law enforcement later recovered over 140,000 Bitcoin, triggering lengthy negotiations over how creditors would be repaid.

The Mt. Gox collapse proved to be a turning point. It highlighted significant vulnerabilities in the cryptocurrency ecosystem, beginning a decade-long legal and financial recovery process.

2024 - The Year of Mt. Gox's $BTC Repayment Plan

The Mt. Gox repayment plan began in 2024 and involved reimbursing those affected by the hack with Bitcoin and Bitcoin Cash ($BCH).

Nobuaki Kobayashi (the exchange's trustee) confirmed the distribution of approximately 142,000 $BTC and 143,000 $BCH, totaling over $9B.

The exchange made significant $BTC transfers to various exchanges (like Bitstamp, Kraken, and BitGo) for the purpose of repayment. This included a 47,229 $BTC transfer, worth ~$3.13B, and now, Mt. Gox moved $2B $BTC to a BitGo wallet.

The moves coincided with a decrease in $BTC's price, prompting fears that the repayments would flood the market with $BTC, causing the price to fall further. A drop in Bitcoin Cash's price further fueled concern.

However, the fear, uncertainty, and doubt (FUD) were overrated. While the repayments triggered short-term fluctuations, they had little overall impact on $BTC's long-term trajectory.

Arkham Intelligence detected the suspected BitGo wallet transactions and tied them to the Mt. Gox repayments because BitGo is the last of five exchanges to receive Mt. Gox-related funds for distribution. This time, the news caused $BTC's price to increase nearly 3% in anticipation.

$BTC Repayments Planned to Minimize Market Movements

The market infusion of large amounts of $BTCand increased selling pressure keep raising concerns about potential price drops.

However, Mt. Gox's structured and gradual approach to repayments was designed to mitigate severe market disruptions, not cause them.

It appears that waiting a decade for repayment has turned Mt. Gox creditors into diamond-hand HODLers who would rather wait than flood the market.

As the Mt. Gox repayments near an end, the market waits for $BTC's next move, hoping that nothing like the Mt. Gox hack will ever happen again.

References

• Bitcoin Price Jumps as $2 Billion in Mt. Gox Repayment Funds Moved (Decrypt)

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