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What $2.2 Billion Means for Market

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Defunct crypto exchange Mt. Gox, once the most significant player in Bitcoin trading, moved $2.2 billion worth of Bitcoin on Monday. The transaction marked one of its largest transactions since its infamous 2014 collapse.

Blockchain analytics firm Arkham Intelligence identified the movement of 32,371 BTC, a transaction that has sent waves through the crypto market.

Mt. Gox Moves 32,371 Bitcoin

Arkham Intelligence’s analysis revealed that a prominent wallet address labeled “1FG2C…Rveoy,” moved 30,371 BTC, while an additional 2,000 BTC initially went to a Mt. Gox cold wallet before being moved to a different, unmarked address.

Spotonchain confirms the report, indicating that over the last four days, Mt. Gox has moved Bitcoin worth $2.22 billion. Among these tokens, 296 BTC valued at $20.13 million was moved to B2C2 and OKX. Such significant transfers are noteworthy because they often signal preparations for creditor distributions.

Read more: Top Crypto Bankruptcies: What You Need To Know

Mt. Gox BTC Transfers
Mt. Gox BTC Transfers. Source: Arkham Intelligence

As BeInCrypto reported, Mt. Gox has already funneled smaller amounts to creditors using exchanges like Bitstamp and Kraken. The exchanges helped facilitate smooth transfers for those affected by the exchange’s collapse a decade ago. Meanwhile, analysts predict continued volatility, especially as the US election cycle adds a layer of uncertainty to global markets.

“The recent $2.2 billion Bitcoin movement and extended repayment timeline from Mt. Gox will likely inject some volatility into the market in the short term. With such a large amount of Bitcoin potentially entering circulation, there’s bound to be short-term price swings as recipients decide whether to hold or sell,” Peter Watson, Chief Market Officer at Velar, told BeInCrypto.  

Indeed, following the transfer, Bitcoin prices momentarily dipped below $68,000 during Asian market trading, briefly rattling investor confidence. However, the asset quickly rebounded to trade for $68,810 as of writing.

BTC Price Performance
BTC Price Performance. Source: BeInCrypto

However, Watson says the impact may be less severe than some fear, especially as many creditors have had years to consider their strategies. Further, he observes that this could benefit market confidence.

“For many, seeing the Mt. Gox saga finally come to a close may reinforce the belief that Bitcoin is better equipped for sustained growth and stability.. ultimately strengthening confidence in its future,”  Watson added.

An Ongoing Saga of Repayment and Recovery

The transfer occurred just a week after Mt. Gox extended its repayment deadline for creditors by another year, much to their frustration. The decision was partly due to the logistical and technical hurdles of coordinating payments to thousands of creditors.

“Many rehabilitation creditors still have not received their repayments because they have not completed the necessary procedures for receiving repayments. Additionally, a considerable number of rehabilitation creditors have not received their repayments due to various reasons, such as issues arising during the repayments process,” Mt. Gox explained.

This process has been an agonizing journey for creditors, filled with delays, legal complications, and financial uncertainty. The repayment saga continues, fueling concerns over market volatility. However, analysts suggest that the postponement could be delaying a potential sell-off.

“$4 billion payment selling pressure now shifted to 2025,” one user shared on X.

Read more: Who Owns the Most Bitcoin in 2024?

According to data on Arkham, Mt. Gox still holds 44,378 BTC, which is valued at approximately $3.05 billion. As the market continues to advance, events like Mt. Gox’s transfers serve as reminders of the industry’s turbulent past. For creditors, however, the wait remains, extending a wait that has already spanned nearly a decade.

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.



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Marathon Digital Raises $1B to Expand Bitcoin Holdings

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Marathon Digital Holdings, one of the largest Bitcoin miners, has completed a record $1 billion offering of 0% convertible senior notes due 2030. The net proceeds from the sale were approximately $980 million.

According to the firm’s statement, the net proceeds will be primarily used to buy Bitcoin

Marathon Digital Holds over $2.5 Billion Worth of Bitcoin

After its last purchase in September, Marathon Digital’s Bitcoin holdings stand at 25,945 BTC. This is currently worth approximately $2.52 billion, as Bitcoin reached an all-time high of $98,000 earlier today. 

However, the company’s decision to expand its holdings potentially points to a larger bullish cycle for the token in the long term. According to its press release, Marathon Digital plans to use $199 million of the net proceeds to repurchase existing convertible notes due 2026. 

The remainder will be used to acquire additional Bitcoin and for general corporate purposes. Marathon Digital is currently the second largest Bitcoin holder among publicly traded companies. 

marathon digital bitcoin holdings
Bitcoin Holdings by Public Companies. Source: CoinGecko

The notes offer flexibility, with options for conversion into cash, shares of Marathon’s common stock, or a combination of both. Redemption terms include the ability for the company to redeem the notes at full principal value plus accrued interest. 

“$1 Billion. 0% interest. MARA has completed the largest convertible notes offering ever amongst BTC miners. The mission, as always: Provide value. Acquire #bitcoin,” the company wrote on X (formerly Twitter). 

Increasing Bitcoin Acquisition Among Public Firms 

Marathon Digital is following an ongoing trend of public companies increasing their Bitcoin holdings in this bull market.  Earlier this week, MicroStrategy announced plans to issue $1.75 billion in convertible notes maturing in 2029. The proceeds will be used to fund additional Bitcoin purchases. 

On the same day, the company secured $4.6 billion worth of Bitcoin, building on a $2 billion acquisition from the prior week. 

Bitcoin’s all-time high and these aggressive purchases propelled MicroStrategy’s stock price by nearly 120% in a single month. The largest Bitcoin holder also entered the list of top 100 public companies in the US. 

Meanwhile, Marathon Digital has faced challenges despite its growing Bitcoin reserves. The company reported a $125 million net loss in Q3. This was driven by a $92 million year-over-year increase in operating costs. 

However, its operational capacity has strengthened. Earlier this month, its energized hash rate surged by 93%, signaling increased mining efficiency. Marathon Digital also signed an $80 million agreement with the Keynan government to expand its Bitcoin mining capabilities. 

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.



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cbBTC Surges Past $1 Billion as Coinbase Ends WBTC Support

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Coinbase, the largest US-based crypto exchange, has announced it will suspend trading for Wrapped Bitcoin (WBTC) on December 19, 2024, at approximately 12 p.m. ET.

The decision, revealed in a post on X (formerly Twitter), cites a routine review of its listed assets to ensure compliance with listing standards. 

Coinbase Sidesteps WBTC Amid cbBTC Boom

The suspension will apply to both Coinbase Exchange and Coinbase Prime. Although trading will cease, WBTC holders will retain full access to their funds and the ability to withdraw them at any time. In preparation for the transition, Coinbase has moved WBTC trading to a limit-only mode, where users can place and cancel limit orders while matches may still occur.

“Coinbase will suspend trading for WBTC (WBTC) on December 19, 2024, at or around 12 pm ET. Your WBTC funds will remain accessible to you, and you will continue to have the ability to withdraw your funds at any time. We have moved our WBTC order books to limit-only mode. Limit orders can be placed and canceled, and matches may occur,” Coinbase detailed.

Coinbase’s move to suspend WBTC comes amid the rapid success of its wrapped Bitcoin token, cbBTC. Recently, cbBTC surpassed a $1 billion market capitalization, reflecting growing adoption and trust within the crypto community. This milestone has further cemented cbBTC’s position as a strong competitor to WBTC in the decentralized finance (DeFi) space.

oinbase’s cbBTC Bitcoin Wrapper Supply and Market Cap Chart
Coinbase’s cbBTC Bitcoin Wrapper Supply and Market Cap Chart. Source: Dune

As of this writing, data on Dune shows that cbBTC market capitalization has increased to $1.44 billion. CBTC’s native availability on networks like Solana, Ethereum, and Base has significantly expanded its accessibility, with Arbitrum being the latest addition.

“cbBTC is live on Arbitrum. cbBTC is an ERC-20 token that is backed 1:1 by Bitcoin (BTC) held by Coinbase. It is natively available on Arbitrum and securely accessible to more users across the Ethereum ecosystem,” Coinbase shared on Tuesday.

Additionally, prominent DeFi protocol Aave is targeting cbBTC for its Version 3 (V3) platform, enhancing its utility within the ecosystem. This growing momentum may have played a key role in Coinbase’s decision to phase out WBTC trading.

WBTC Core Team Urge Coinbase to Reconsider

The team behind Wrapped Bitcoin expressed regret and surprise at Coinbase’s decision. In a statement on X, WBTC’s core team emphasized its commitment to compliance, transparency, and decentralization. 

“We regret and are surprised by Coinbase’s decision to delist WBTC…We urge Coinbase to reconsider this decision and continue supporting WBTC trading,” the team said.

The statement outlined WBTC’s longstanding reputation for novel mechanisms, regulatory compliance, and decentralized governance. Highlighting its seamless integration with DeFi protocols, WBTC described itself as an essential liquidity solution for Bitcoin users. Urging Coinbase to reconsider, WBTC reaffirmed its readiness to address any concerns or provide additional information to support its case.

Meanwhile, Coinbase’s announcement has sparked mixed reactions across the crypto community. Some users criticized the exchange, suggesting the decision reflects an inability to handle competition.

“Coinbase can’t handle fair competition?? WBTC superior to cbBTC” said Gally Sama in a post.

Nevertheless, others support the move, citing concerns over WBTC’s custody model, with one user referencing BitGo’s recent adoption of a multi-jurisdictional custody system.

“You put custody in the hands of a fraud. What did you think was gonna happen?” the user expressed.

This critique aligns with growing fears about Justin Sun’s involvement in WBTC’s custody processes, as BeInCrypto reported recently. Some users have acted preemptively to avoid potential risks, with one commenter sharing their reservations.  

“When Sun got on the multisig for WBTC, I sent all my WBTC on OP to Coinbase and exchanged for true BTC that I withdrew to my hardware wallet… You gave me confirmation just now that I made the right move,” they wrote.

The decision to suspend WBTC trading could mark a pivotal moment in the competition between wrapped Bitcoin solutions. While cbBTC’s integration across multiple blockchain networks has gained momentum, skepticism surrounding WBTC’s custody model and leadership has intensified.

Justin Sun has voiced criticism of Coinbase’s cbBTC strategy, labeling it a setback for Bitcoin’s broader adoption. As the debate continues, the industry watches closely to see whether Coinbase’s cbBTC will solidify its dominance or if WBTC can regain its position as a leading wrapped Bitcoin solution. Regardless, the shifting dynamics reflect the importance of transparency, governance, and community trust in shaping the future of DeFi.

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.



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Bitcoin Faces ‘Bank Run’ Risk, Cyber Capital’s Bons Warns

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Bitcoin (BTC) may be at risk of a catastrophic “bank run,” according to Justin Bons, founder and CIO of Cyber Capital.  

A bank run is when customers withdraw their deposits from a financial institution over fears of insolvency. 

Bitcoin Cannot Handle Mass Exits, Bons Says

In a detailed social media thread, Bons highlighted critical flaws in Bitcoin’s transaction capacity, self-custody model, and network security. In his opinion, these could lead to a crisis that would destabilize the network and devastate investors. 

Bons’ analysis centers on Bitcoin’s limited transaction processing capability, which he calculated at approximately seven transactions per second (TPS). Using data from Glassnode and Bitcoin’s code, he argued that Bitcoin’s 33 million on-chain users would face a bottleneck if a mass panic triggered simultaneous exits. 

“At this rate, the queue would be 1.82 months long under optimal conditions. However, in reality, transactions would get stuck and eventually be dropped, making it impossible for smaller parties to exit unless they pay exorbitant fees,” Bons explained.

Bons warned that this limitation could lead to a “death spiral,” where a price crash forces miners to shut down, slowing the network further. The resulting delays could deepen the panic, creating a vicious cycle of declining hash rates, prolonged block times, and falling prices. 

Further in his critique of BTC, Bons claimed Bitcoin’s transaction capacity is insufficient for real-world use. He compared Bitcoin’s 7 TPS to other systems, such as Visa’s 5,000 TPS, or even competitors in the crypto space that exceed 10,000 TPS without sacrificing decentralization. 

“There are literally ZERO use cases that can be supported by 7 TPS. Mass self-custody over BTC is a dangerous narrative. The only scalable path forward for BTC adoption is through centralized custodians and banks, contradicting its ethos as ‘freedom money’,” he stated.  

Bons also questioned Bitcoin’s long-term sustainability, citing its shrinking security budget. This, in his opinion, is a critical issue that could exacerbate the risks he outlined. The thread also touches on Bitcoin’s deviation from its original vision as “peer-to-peer (P2P) electronic cash.” He lamented that the network’s constraints and governance have turned it into a speculative asset rather than a practical medium of exchange. 

Bons’ remarks ignited a heated debate on X (formerly Twitter). Patrick Flanagan, a self-described tech expert, dismissed the claims.

“This is pure fantasy. If this was going to occur, it would have occurred years ago,” Flanagan argued.

Bons rebutted, asserting that the risk increases as the number of users grows. He noted that even a fraction of users leaving could trigger a run and added that the larger the network gets, the more severe the problem becomes.

Other users highlighted potential alternatives, such as trading wrapped Bitcoin (WBTC) on Ethereum, which bypasses Bitcoin’s base layer limitations. Bons acknowledged this but noted that wrapped BTC users could exit quickly while on-chain users would be trapped, exacerbating the sell-off.  The discussion also extended to Bitcoin’s self-custody model.

“This is something that self-custody advocates should pay attention to. One tiny bit of FUD and everyone gets their money stuck,” DashPay’s Joel Venezuela remarked.

Bons responded, acknowledging the difficult position he finds himself in as a cypherpunk and self-custody advocate. Another user raised a comparison to gold, questioning how long it would take to liquidate global gold holdings. Bons countered that while gold also has practical limits, its theoretical transaction capacity far exceeds Bitcoin’s, making it less susceptible to such bottlenecks. 

Critics of Bons’ analysis argue that Bitcoin has weathered similar concerns in the past without collapsing. However, his warning adds to a growing chorus of voices calling for a reevaluation of Bitcoin’s scalability and usability. 

Despite his grim outlook for Bitcoin, Bons remains optimistic about the broader cryptocurrency space. “There is much hope left for cryptocurrency as a whole,” he concluded, suggesting that Bitcoin’s original ethos now thrives in other blockchain projects. 

Meanwhile, while Bitcoin remains the dominant cryptocurrency, debates over its scalability and resilience continue. Bons’ warning serves as a stark reminder of the challenges Bitcoin faces as it seeks broader adoption in a changing financial space. Elsewhere, Galaxy CEO Mike Novogratz has almost similar reservations about a Bitcoin reserve in the US.

“I think that it would be very smart for the United States to take the Bitcoin they have and maybe add some to it… I don’t necessarily think that the dollar needs anything to back it up,” Novogratz claimed.

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.



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