Mt. Gox Isn't Done with Its Bitcoin Repayments, as the Exchange Moves $2B BTC to New Wallets

The defunct crypto exchange Mt. Gox isn't done with its Bitcoin repayments to creditors, as on-chain data shows that the exchange recently moved a significant amount of BTC.

Defunct crypto exchange Mt. Gox’s recent on-chain activity has revealed that the exchange moved a significant amount of Bitcoin (BTC) on August 13th. This development comes after the exchange began repaying its creditors last month, following the approval of a rehabilitation plan in 2018.

As per on-chain analytics platform Arkham Intelligence, a wallet (bc1q26) that had received $2.19 billion worth of Bitcoin from Mt. Gox initiated test transactions on August 13th. This wallet is believed to belong to Bitgo, the fifth and final exchange that was approved by the trustee for the BTC repayments.

After receiving the 33,105 BTC (around $2.19 billion) from Mt. Gox, Bitgo might be preparing to distribute these Bitcoins to creditors. Following the test transaction, Bitgo moved Mt. Gox’s $2 billion BTC to another wallet (bc1qpn5), which could be a security measure before they begin repaying creditors.

These Bitcoin transfers are also believed to be related to creditor repayments, as some users on a Mt. Gox Reddit channel recently claimed that they had received BTC in their Bitgo account.

Mt. Gox’s Bitcoin Repayments Began Last Month

As mentioned earlier, Mt. Gox began repaying its creditors last month, which caused the crypto market to panic as BTC dropped to as low as $54,000. These BTC distributions also raised concerns that Mt. Gox creditors may sell off their BTC once they receive it, putting significant selling pressure on the flagship cryptocurrency.

However, according to the on-chain analytics platform Cryptoquant, these Mt. Gox creditors chose to hold rather than sell their BTC holdings. Cryptoquant pointed out a spike in withdrawals from Kraken following the Mt. Gox Bitcoin repayments through the exchange, which suggests that these creditors were moving their coins to cold wallets.

This explains why Bitcoin remained stable despite the recent Mt. Gox BTC transfers. However, the defunct crypto exchange still holds 46,164 BTC ($2.81 billion), which could still significantly impact the market, depending on whether other creditors decide to hold.

Bitcoin Awaits Critical Inflation Report

Bitcoin has continued to trade sideways as investors await the July Consumer Price Index (CPI) inflation report, which will be released on August 14th. A positive inflation reading would strengthen the case for the US Federal Reserve to cut rates in September, boosting investors’ confidence in risk assets like Bitcoin and other cryptocurrencies.

The July Producer Price Index (PPI) inflation report, which was released on August 13th, was positive, coming in lower than expected. As such, a positive CPI inflation report might be all the confirmation that the Fed needs that inflation has indeed slowed and that now is the perfect time for the rate cuts.

After the August 5th Bitcoin crash, Bernstein analysts predicted that Bitcoin’s price would turn bullish again when the Fed cuts interest rates.

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