Mt. Gox starts repayments via exchange transfer

According to data from Arkham Intel, Mt. Gox has begun the process of repaying its creditors by transferring a nominal amount in Bitcoin to one of the designated exchanges. This development follows months of speculation and planning regarding the payout of approximately $8.2 billion in Bitcoin owed to creditors of the defunct exchange.

Are Mt. Gox Bitcoin Refunds Starting?

Earlier today, three wallets historically linked to Mt. Gox executed three transactions, the most significant of which was the transfer of $24 in Bitcoin to a wallet that then transferred those funds to Bitbank’s hot wallet. Bitbank, listed as one of the exchanges authorized to process refunds alongside Kraken, Bitstamp, SBI VC Trade and Bitgo, will make those funds available to its customers within a period of up to 90 days after receipt.

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However, there is some uncertainty surrounding these transactions as the funds were not transferred directly from the primary Mt. Gox wallets. Observers speculate whether this activity could be a preliminary test before larger transfers to repay creditors. The Mt. Gox recovery trustee has previously indicated that the repayment process is set to begin in early July, although specific dates for the transfers have not been publicly announced.

The other two transactions, a BTC transfer worth $3.00 and another worth $0.32, were transferred to a new wallet.

This subtle movement of money comes amid a turbulent period for Bitcoin, whose price has fallen more than 20 percent since hitting $72,000 and now stands at around $57,700.

What to expect

Peter Chung, head of research at Presto Research, recently provided insights into the wider impact of Mt. Gox’s repayments. He outlined the expected dynamics between Bitcoin (BTC) and Bitcoin Cash (BCH) and predicted significant trading opportunities.

“The Mt. Gox recovery trustee plans to distribute billions of dollars worth of BTC and BCH to Mt. Gox creditors between July 1 and October 31, 2024. This will likely change the supply/demand dynamics of BTC and BCH during this four-month period and potentially open up a pairs trading opportunity,” he explained.

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Chung highlighted the different impact on BTC and BCH: “Our analysis shows that the selling pressure for BCH will be four times greater than for BTC – i.e. 24% of daily trading value for BCH versus 6% of daily trading value for BTC. This difference reflects the different investor bases, with BCH being significantly weaker and more inclined to sell holdings.”

He advised traders on possible strategies: “Long BTC perpetuals paired with short BCH perpetuals is the most efficient market-neutral way to express this view, aside from funding rate risk.” For those concerned about volatile funding rates, Chung recommended “looking at other approaches, such as short-term futures or adding BCH to the spot market.”

At press time, BTC was trading at $57,727.

Featured image created with DALL·E, chart from TradingView.com