The cryptocurrency market continues to face sharp declines, with its total market cap dropping to $2.44 trillion on Tuesday, the lowest since early November.
Bitcoin (BTC) has fallen below $77,000 for the first time since November 2024, while other leading digital assets such as Ethereum (ETH) have also tanked to multi-month lows, testing the bullish narrative of the cycle.
A significant factor contributing to investor concerns is the recent movement of Bitcoin from Mt. Gox, the defunct exchange that collapsed over a decade ago.
The platform transferred 11,833 BTC, valued at approximately $932 million, raising fresh uncertainty about the potential impact on market stability.
This development also triggered over $937 million in liquidations within 24 hours, increasing volatility across digital asset markets.
Mt. Gox has once again moved a substantial portion of its Bitcoin holdings, shifting 11,834 BTC worth roughly $910 million. Of this, 11,502 BTC (valued at around $885 million) was sent to a new wallet, while 332 BTC ($25.5 million) was transferred to a “warm” wallet used for transactions and fund management.
This movement comes just five days after the platform sent 166.5 BTC to BitGo, a digital asset custodian, suggesting an ongoing process of distributing repayments to creditors who lost funds during the exchange’s collapse.
The release of such a large volume of Bitcoin into the market has intensified concerns over potential price fluctuations. The primary fear is that creditors, who have waited years to recover their funds, might sell their Bitcoin holdings upon receiving them. A sudden influx of Bitcoin into circulation could drive prices lower, further exacerbating the current market downturn.
Some repayments have already been processed through exchanges like Kraken and Bitstamp, but the full distribution remains a drawn-out process.
The crypto market reacted sharply to the latest Mt. Gox transfers, leading to widespread liquidations across multiple exchanges. Within 24 hours of the Bitcoin movements, over $937 million worth of positions were liquidated, highlighting the heightened uncertainty among investors. Bitcoin, already under pressure from macroeconomic concerns, saw additional selling pressure as traders anticipated increased volatility from the expected creditor repayments.
The broader implications of Mt. Gox’s ongoing repayments remain uncertain. If creditors decide to hold their recovered Bitcoin, market impact may be minimal.