Bitcoin is retreating as traders consider the risk of selling linked to Mount Gox

(Bloomberg) — Bitcoin fell as traders checked transfers from wallets belonging to the failed Mount Gox exchange, whose administrators have stepped up efforts to return a $9 billion treasure of the largest digital asset to creditors.

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The native cryptocurrency fell as much as 3.1% to trade at around $67,720 as of 12:52 PM in Singapore on Tuesday. The weakness spread to smaller coins, including Ether in second place.

According to data from CryptoQuant and Arkham Intelligence, approximately 42,829 Bitcoin worth around $2.9 billion was withdrawn from Mount Gox wallets in the early Asian hours on Tuesday. The wallets still contained 95,061 Bitcoin after the outflow.

Tokyo-based Mount Gox, once the world’s largest Bitcoin exchange, was hacked in 2011 and went bankrupt in 2014. Last year, US prosecutors accused two Russian nationals of conspiring with others to break into the exchange’s servers.

Mount Gox’s liquidator has said creditors should see basic, interim and early lump sum payments by October 31 as the liquidation process progresses. A key question is whether those who receive the tokens will sell, putting pressure on Bitcoin.

Tuesday’s movements in the Mt. Gox wallets are the first since May 2018, and the fallen platform previously held around 137,892 Bitcoin, data from CryptoQuant shows.

Previous documents indicated that Mount Gox also had Bitcoin Cash and fiat currency. Some of the fiat money has already been returned. Bitcoin Cash lost as much as 5% on Tuesday.

Bitcoin bounced back from a deep bear market in 2022 by quadrupling since the start of last year, helped by the launch of spot Bitcoin exchange-traded funds in January. The token reached a record high of $73,798 in mid-March.

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