Mt.Gox Repayments: Will $8 Billion Flood Crash the Crypto Market?

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After the Mt.Gox rehabilitation trustee, Nobuaki Kobayashi, announced the commencement of the repayments of creditors funds under the rehabilitation plan in July, crypto prices registered heightened volatility. The uncertainty of how the Mt.Gox customers and creditors could use the $8 billion sent shivers to the entire crypto market in fear of the worst. 

During the first round of Mt.Gox repayments, through different exchanges led by Kraken, the Bitcoin price dropped from $63k to hovering around $53k in two weeks. 

Mt.Gox Distribution of Funds Soon

According to on-chain data analysis provided by Arkham Intelligence, Mt.Gox is preparing to make more repayments soon after making strategic wallet movements. In the last 24 hours, Mt.Gox emptied four of its wallets after receiving Bitcoins worth about $370 from Kraken exchange.

With the Mt.Gox funds, amounting to 44.89K BTCs,  now consolidated in a cold wallet, Arkham Intelligence believes more repayments are on the horizon to creditors who did not receive funds in the first quota. 

More Crypto Shakeouts in the Horizon?

Bitcoin price has closely mirrored the Gold price action in the past, and Wall Street analysts believe a major crypto uproar is on the horizon. As a result, the fear of further crypto capitulation has significantly diminished, with Bitcoin’s fear and greed index hovering around 59 percent, suggesting investors’ greed.

However, the Mt.Gox repayment of nearly $3 billion could trigger bearish volatility in the near term before the bullish cycle begins in the fourth quarter.