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On July 16, Mt. Gox moved more than $9 billion worth of Bitcoin to a known cold wallet and two unidentified addresses. This massive movement has caused volatility in the price of Bitcoin and some other altcoins. Meanwhile, Bitcoin sentiment has swung from "extreme fear" to "greed" over the past few days, influenced by market rallies and impressive investments in spot Bitcoin ETFs and Metaplanet's recent acquisition of 21.88 Bitcoin, boosting its holdings to 203 BTC.
Mt. Gox Moves Billions in Bitcoin
On July 16, Mt. Gox moved more than 140,000 Bitcoin (BTC), valued at close to $9 billion, to a known cold wallet and two unidentified addresses. According to data from Arkham Intelligence, Mt. Gox's main wallet still holds 138,985 Bitcoin, worth approximately $8.8 billion. This is the first time Mt. Gox funds were moved in two weeks.
Two transactions moved about 96,000 BTC, valued at over $6 billion, to unknown wallets, while an initial 44,527 BTC was transferred to a known Mt. Gox cold wallet. The total combined volume of Bitcoin transactions by Mt. Gox on July 16 was almost 190,000 BTC. This means that more than $12 billion worth of BTC was moved in just three hours.
An unknown address ending in "BHDct9b" received 42,587 BTC worth $2.69 billion, while 4,641.24 BTC worth $293.94 million was sent to the "Mt. Gox: Cold Wallet (1Jbez)." The "BHDct9b" address still has to transfer the 42,587 BTC, which has caused some uncertainty among traders. Another 48,641 BTC was sent to a second unknown address, moving $3.07 billion out of the main Mt. Gox wallet.
Mt. Gox transactions (Source: Arkham Intelligence)
Mt. Gox announced on July 5 that it will start to repay its Bitcoin and Bitcoin Cash debts to creditors, and that their repayments will be made via designated crypto exchanges. The announcement named Mt. Gox Co. Ltd. as the Rehabilitation Debtor and Nobuaki Kobayashi, an attorney, as the Rehabilitation Trustee.
The statement indicated that remaining rehabilitation creditors will receive funds shortly after meeting the necessary conditions. The fact that Mt. Gox carried out more than $9 billion in BTC transactions means that the promises of repayments may become a reality as soon as August.
Some BTC Traders Turn Cautious
While Mt. Gox creditors are smiling, BTC traders are a bit more nervous. On July 16, Bitcoin's price jumped to almost $65,000 but quickly dropped to $63,000, which is an almost 3% decline. At press time, BTC was trading hands at $63,375.79.
BTC price chart (Source: CoinMarketCap)
This price drop had a ripple effect on the cryptocurrency market, with altcoins like Uniswap (UNI), Polkado (DOT), and Bitcoin Cash (BCH) being hit with price dips.
Historical events surrounding Mt. Gox has often negatively impacted prices due to fears of mass Bitcoin sales. However, some experts argue these fears are overblown. Crypto investor and YouTuber Quinten Francois dismisses these concerns as another round of "Bitcoin FUD."
Unfortunately, this concern over Mt. Gox interrupted what was one of Bitcoin’s best performances in weeks. The last time BTC was able to hit $65,000 was on June 21. This price point is a key level associated with the short-term holder cost basis, and acts as support during bull markets.
What Happened with Mt. Gox?
Mt. Gox was a Tokyo-based crypto exchange that operated from 2010 to 2014. During this time, it became one of the most well known and popular platforms in the early days of Bitcoin.
At its peak, Mt. Gox handled over 70% of all Bitcoin transactions. Despite its dominance, the exchange still faced some security issues and hacking incidents. In 2011, hackers exploited stolen credentials to transfer BTC, and network protocol deficiencies led to the loss of several thousand Bitcoins.
Leading up to its collapse in February of 2014, Mt. Gox customers increasingly faced issues withdrawing funds because of technical bugs and the company’s inability to manage transaction details accurately. In early February 2014, Mt. Gox suspended withdrawals after detecting suspicious activity in its digital wallets and then discovered the loss of hundreds of thousands of Bitcoins. While the company later found 200,000 Bitcoins, the massive loss destabilized the market and pushed Mt. Gox into insolvency.
The financial impact of the missing Bitcoins, which were valued in the hundreds of millions, led Mt. Gox to file for bankruptcy in the Tokyo District Court in April 2014. The court ordered the company to liquidate and devise a plan to repay creditors.
Bitcoin Sentiment Swings from Fear to Greed
Despite the market keeping a very close eye on the movements of Mt. Gox, Bitcoin sentiment has recently shifted from "extreme fear" to "greed" and "FOMO" within days. In just the past week, BTC’s price managed to climb by about 10%.
On July 16, crypto analytics platform Santiment warned people to still be cautious despite this sudden bullish trend. According to Santiment, investors should be wary when the market becomes overly optimistic without clear signs of fear. Santiment believes a lot of this optimism is due to investor confidence in the potential election victory of Donald Trump and his crypto-friendly VP pick JD Vance in November.
Between July 13 and July 16, the Crypto Fear & Greed Index, which tracks Bitcoin sentiment, moved sharply from "extreme fear" to "greed" as the crypto market rallied. Additionally, Bitcoin exchange-traded funds (ETFs) have shown strength, with the eleven spot Bitcoin funds saw net inflows totaling $300.9 million on July 15. Leading the inflows were funds from BlackRock and Ark 21 Shares, each securing $117.2 million, according to data from FarSide Investors.
Metaplanet Buys More Bitcoin
The market's thirst for BTC is reflected in the fact that investment firm Metaplanet has bought an additional 21.88 Bitcoin, valued at over $1.2 million. As of July 16, Metaplanet's Bitcoin holdings total 203 BTC, worth $13 million.
This latest acquisition has resulted in a 9% jump in Metaplanet's share prices on the Tokyo Stock Exchange, according to Google Finance data.
Earlier this month, Metaplanet capitalized on a price dip, and bought 42.46 Bitcoin on July 7 for $2.5 million (400 million yen). Since unveiling its Bitcoin investment strategy on Apr. 9, 2024, Metaplanet's stock price has increased almost six-fold. Despite this, the firm is up only 2.8% on its Bitcoin holdings, given its average purchase price of $62,890 per Bitcoin.
Metaplanet is now the world's 21st-largest corporate holder of Bitcoin according to CoinGecko, and has even been called "Asia’s MicroStrategy" because of its similar investment approach to Michael Saylor's MicroStrategy.
On May 13, Metaplanet announced it will use a range of capital market instruments to boost its Bitcoin reserves. This strategy aims to hedge against Japan's worsening debt burden and the rapidly depreciating yen, which has fallen close to 54% against the US dollar since January 2021. In contrast, Bitcoin has increased by more than 145% against the yen in the past 12 months.
