According to cryptocurrency analysis firm Arkham, the now-defunct crypto exchange Mt. Gox has moved $2.8 billion worth of Bitcoin (BTC) to an internal wallet. The platform may be preparing to repay clients who lost their holdings after the exchange was hacked in 2014. As of late 2014, Mt. Gox handled nearly 70% of the global BTC volume. According to LookOnChain, Mt. Gox currently holds 138,985 BTC worth around $8.87 Billion.
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It is yet unclear if the now-defunct exchange is actually preparing to repay its clients or if it is reshuffling its Bitcoin holdings. Clients who lost their holdings have waited for nearly ten years for a reimbursement.
Will Bitcoin face another correction?
Fears around a Mt. Gox related sell off gripped the cryptocurrency market over the last few weeks, leading to a significant price correction. The German government’s BTC selling spree also added to market woes. The $2.8 billion BTC transfer may have a similar impact on the market.
There is a possibility that the recipients of the reimbursement will sell their BTC. This may cause a significant sell pressure on the market. There is also a possibility that the Mt. Gox clients will continue to hold their assets, given BTC’s incredible performance over the last decade.
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Mt. Gox also has a phased reimbursement plan, which may add additional cushioning to any possible sell-offs.
According to a recent report by CCData, Bitcoin is yet to reach the top of its appreciation cycle. The platform anticipates BTC to hit a new all-time high. The report states, “we have observed a decline in trading activity on centralised exchanges for nearly two months following the halving event in previous cycles, which seems to have mirrored this cycle. This suggests that the current cycle could expand further into 2025.“