The long-running Mt. Gox saga has returned to the spotlight as blockchain analysts detect new moves in the defunct exchange's portfolios for the first time in seven months.
This move comes just weeks before a key redemption deadline, raising concerns about renewed market FUD (fear, uncertainty and doubt).
Arkham records show that Mount Gox still holds approximately 34,000 Bitcoin, which has yet to be repaid to creditors. The court-approved extension expires on October 31, 2025 (Japan time).
The extension was because some creditors had not completed the necessary procedures or experienced problems during repayment. As the redemption deadline approaches, investor concerns about the looming selling pressure are increasing.
According to CryptoQuant analyst Mignolet, the remaining funds, worth more than $3.88 billion, could soon hit the market if the trustee fails to secure another postponement. Such an outcome could unleash a new wave of selling pressure and fear.
“When the extension was announced, action had to be taken before October 31…If there is no further extension, these 34,000 bitcoins will eventually hit the market, which could clearly become a catalyst for FUD to be recreated,” Mignolet said.
Mount Gox began distributing Bitcoin and Bitcoin Cash refunds in July 2024, marking a milestone after nearly a decade of legal proceedings.
While previous sales and government liquidations were largely absorbed by over-the-counter (OTC) demand, analysts warn that may not be the case this time.
“Last year, about 80% of the German government's volume was processed via OTC trading,” Mignolet noted, referring to Coinbase Prime's role as a major institutional liquidity platform. “But unlike last year, that volume is now weakening. It remains uncertain whether the market can absorb 34,000 Bitcoins at once as before.”
The analyst added that if OTC channels fail to suck up supply, the coins could flow directly to public markets, increasing volatility.
The timing is also seen as 'unfavourable' given weakening institutional demand and broader macro uncertainty.
One potential buffer, Strive (ASST), had previously announced plans to follow MicroStrategy's playbook by purchasing Bitcoin as operating capital starting in May 2025.
