The long-running Mt.Gox saga is back in the spotlight as blockchain analysts detect new activity in wallets on defunct exchanges for the first time in seven months.
The move comes just weeks before a key repayment deadline, raising concerns about renewed FUD (Fear, Uncertainty and Doubt) in the market.
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Mt Gox wallet brings forward the deadline for repayment of 34,000 BTC
According to Arkham data, Mt.Gox still holds about 34,000 bitcoins and needs to repay creditors. The court-approved extension expires on October 31, 2025 (Japan time).
This extension was made because some creditors had not completed the necessary procedures or encountered problems during repayment. As repayment deadlines approach, investors are increasingly concerned about impending selling pressure.
If the trustees are unable to secure further delays, the remaining funds, worth more than $3.88 billion, could enter the market soon, according to CryptoQuant analyst Mignolet. Such an outcome could trigger a new wave of selling pressure and fear.
“When the extension is announced, we have until October 31st to take action…Without further extensions, these 34,000 Bitcoins will end up in circulation on the market, which clearly could be the trigger for creating FUD again,” Mignolet said.
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Declining liquidity raises market concerns
Mt.Gox will begin distributing Bitcoin and Bitcoin Cash repayments in July 2024, marking a milestone after nearly a decade of legal proceedings.
Previous sales and government liquidations were largely absorbed by over-the-counter (OTC) demand, but analysts warn that may not be the case this time.
“Last year, approximately 80% of the German government’s trading volume was processed through over-the-counter transactions,” Mignolet noted, referring to Coinbase Prime’s role as the primary institutional liquidity venue. “However, unlike last year, the amount is currently trending down. It remains uncertain whether the market will be able to absorb 34,000 Bitcoins at once like before.”
The analyst added that if OTC channels are unable to absorb supply, coins could flow directly to the public market, amplifying volatility.
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The timing is also considered “unfavorable” amid declining demand from institutional investors and growing macro uncertainty.
Questions about Strive’s Bitcoin strategy
One potential buffer, Strive (ASST), had previously announced plans to buy Bitcoin as a corporate financial asset starting in May 2025, following MicroStrategy’s strategy.
The company, headed by Vivek Ramaswamy, has offered to help absorb part of Mt.Gox’s distribution. However, Mignolet expressed doubts about the plan’s feasibility.
“Strive raised $750 million through the PIPE offering, all of which was used to purchase 5,800 Bitcoins at an average price of $116,000… At least $4 billion in funding would be required to absorb Mt. Gox’s volume, but it is unclear whether such funding can be secured in the current circumstances,” he said.
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With MicroStrategy’s stock price under pressure and similar companies facing investor fatigue, Strive’s ability to act as a stabilizing force looks increasingly limited. There is a possibility that the repayment schedule could be further extended, but that would “lead to bad news.”
Familiar wallet activity sparks speculation
Adding to the tension, wallets linked to Mt Gox have recently shown on-chain activity reminiscent of past pre-repayment tests.
“After 7 months, movement was detected in Mt. Gox’s wallet… In the past, Mt. Gox conducted small Bitcoin transfers for transaction testing just before repayment. Similar movements are now being observed,” Mignolet posted on X.
Whether these trades signal an impending repayment remains to be confirmed, but this coincidence has reignited fears of another Mt Gox-led selloff at a time when market liquidity and sentiment appear to be at their most fragile.
