Cryptocurrency exchange Bitstamp is set to send Bitcoin (BTC) and Bitcoin Cash (BCH) to Mt. Gox creditors. The distribution is part of the ongoing repayment process announced by Mt. Gox’s Trustee earlier this month.
Following Kraken, Bitstamp is next in line to distribute funds to Mt. Gox victims as part of the ongoing repayment process. After many years, it looks like long-locked BTC is about the hit the markets.
Bitstamp said it had received the crypto assets from the Mt. Gox trustees and is working to return the funds to Bitstamp customers who are Mt. Gox creditors. However, Bitstamp noted that the plan will exclude UK residents.
“There will be a separate distribution plan. Rest assured, we’ll keep you updated on the process and ensure you receive your assets as soon as possible,” said Bitstamp.
More BTC Hitting Markets
Bitstamp’s announcement came after Mt. Gox reactivated its crypto wallet and started to move Bitcoin. The entity also made several testing transfers ahead of the large transactions.
According to data from blockchain analytics firm Arkham Intelligence, on Tuesday, Mt. Gox transferred $2.85 billion worth of Bitcoin to new wallets. The entity then sent 5,110 BTC, valued at around $340 million, to four separate Bitstamp addresses.
Arkham reported that earlier today, Mt. Gox moved $2.47 billion in Bitcoin to new wallets and distributed 5,106 BTC, equivalent to $335,8 million, to four separate Bitstamp addresses.
Bitstamp is one of the five cryptocurrency exchanges designated to facilitate repayments to Mt. Gox’s creditors, alongside Bitbank, Kraken, SBI, and VC Trade. Earlier this month, Mt. Gox sent $84.9 million in Bitcoin to the Japanese exchange Bitbank and $3 billion to Kraken.
Following the activities, Kraken confirmed it got Bitcoin and Bitcoin Cash from the Mt. Gox trustees. Some Mt. Gox creditors said they received repayments from Kraken this week. Now it looks like more is on the way.
Bitcoin Resilient Amid Mt. Gox Repayments
The market has reacted negatively to the initiation of repayments by Mt. Gox, with increased volatility and a decline in cryptocurrency prices. Following the announcement of repayments, Bitcoin’s price dropped to $54,000, marking its lowest level in five months.
The Mt. Gox trustees are repaying around 141,686 BTC, valued at around $9.4 billion, to their creditors. The decline could be due to selling pressure as creditors began to receive their funds, which raised concerns about a potential influx of Bitcoin into the market.
Market analysts have expressed concerns that the influx of such a large amount of Bitcoin could destabilize prices, especially if creditors opt for a fire sale to recoup their losses.
On the other hand, many analysts believe that the Bitcoin market has matured since the 2014 collapse of Mt. Gox and may be better equipped to handle the increasing supply of Bitcoin.
Some believe that many Mt. Gox creditors may choose to hold assets rather than sell them since they were among the first Bitcoin adopters, and are now long–term holders.
Other major events, like the auctioning of seized Bitcoin from the Silk Road or the liquidation from German authorities, did not cause major long-term declines in Bitcoin’s price. This suggests that the market can absorb large amounts of Bitcoin without knocking the price down.
Still, sentiment remains bearish. Analysts expect continued volatility in the short term as the market needs time to adjust to the repayments. Given the fact the JPY is collapsing, there could be a big move up soon.
Despite the immediate bearish reaction and occasional price drops, Bitcoin has been quick to recover the losses, according to data from CoinGecko. Bitcoin is trading at around $66,000, down slightly in the last 24 hours. The cryptocurrency is 10% away from its previous all-time high set in mid-April.
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