The Mt.Gox cryptocurrency exchange has moved 47,229 BTC, valued at around $2.7 billion, from a cold wallet to a new wallet.
The subsequent transactions show that these coins are already on the move, and Mt.Gox is reimbursing some creditors.
Arkham Intelligence said 2,701 BTC, worth $148 million, was sent from the new wallet to the BitBank cryptocurrency exchange.
Another 1,157 BTC, worth $63 million, was sent to an unknown platform, which could be a repayment exchange.
The wallet address is expected to continue transferring the funds to exchanges to reimburse the creditors who lost their funds after Mt.Gox collapsed in 2014.
99% of Mt.Gox Creditors Will Dump To The Market
Mt.Gox initially announced the reimbursements in June. The exchange moved 141,000 BTC on May 28 to new wallet addresses. The Mt.Gox Rehabilitation Trustee said the reimbursements will commence in early July.
The crypto market has been growing anxious about the movement of these coins, with a dump anticipated in the market.
Bitcoin has dropped by nearly 4% in the last 24 hours. The global crypto market cap is also down 5.1% to $2.12 trillion.
According to Jacob King, a finance analyst, the defunct Mt.Gox exchange repayments will add an $8.2 billion selling pressure on Bitcoin.
He stated that on-chain data shows that the Mt.Gox creditors have already started selling, and the price could continue dropping.
“On-chain data showed a hefty increase in selling volume from these wallets. No Bitcoiner will say this out loud, but the majority of the $8.2 billion in BTC that is set to be distributed back to ex-clients are going to be sold off,” King said.
The Mt.Gox exchange will send over $9 billion worth of Bitcoin to creditors. This amount will be distributed to these creditors from July to October 2024.
Given that these creditors have been waiting for more than ten years to recover their funds, they could seek to sell.
The price of Bitcoin has gained by more than 8,500% in the last decade, and these creditors might look to secure profits.
Bitcoin Supply Overhang Will Cause BTC Price To Drop Lower
According to crypto market analyst @DaanCrypto, the selling pressure by Mt.Gox and the German government has created a supply overhang in the market. This will cause the price to drop lower before the demand increases to support the price action.
He noted that the recent developments have created a mid-cycle bear market for Bitcoin, which happens during every market cycle.
As such, the current bear market could take months before being eradicated.
Data from IntoTheBlock further notes that panic selling is behind the ongoing price drops.
Around 30,000 BTC, worth $1.73 billion, was transferred to exchanges over the past week as traders looked to offload their coins from the market.
