Bitcoin experienced a decline as traders closely watched transfers from wallets associated with the defunct Mt. Gox exchange. The Tokyo-based platform, once the largest Bitcoin exchange in the world, has been moving forward with plans to distribute a $9 billion cache of Bitcoin to its creditors, stirring market concerns about potential selling pressure.

The leading cryptocurrency fell by as much as 3.1%, trading around $67,800 as of late afternoon Tuesday in Singapore. The drop extended to smaller cryptocurrencies, including Ether, the second-largest by market cap.

Significant movements were noted early Tuesday in Asian hours, with over 107,000 Bitcoins, valued at more than $7.2 billion, being transferred out of Mt. Gox’s wallets. This was tracked by CryptoQuant and Arkham Intelligence. It marked the first such wallet activity since May 2018, highlighting the ongoing unwinding process of Mt. Gox’s holdings, which once totaled about 137,892 Bitcoins.

Mt. Gox suffered a significant hack in 2011 and eventually declared bankruptcy in 2014. Last year, U.S. prosecutors charged two Russian nationals with conspiring to infiltrate the exchange’s servers. The legal and recovery processes have been lengthy, culminating in the current distribution phase to creditors, with the trustee overseeing the bankruptcy indicating that payments are expected to be made by October 31.

Another layer of complexity is added by the holdings of Bitcoin Cash and fiat currency by Mt. Gox. While some of the fiat has already been returned to creditors, Bitcoin Cash also felt the market’s anxiety, dropping as much as 5% on Tuesday.

Despite these movements, some industry leaders like Caroline Bowler, CEO of BTC Markets, believe the impact will be short-lived. Bowler suggested that while the Mt. Gox situation might temporarily affect Bitcoin’s price, the overall market has shifted its focus towards more positive developments such as bipartisan support for crypto-friendly regulations in the U.S.

Bitcoin has shown resilience, bouncing back from a challenging 2022 to quadruple in value since early last year. This rally was bolstered by the launch of spot Bitcoin exchange-traded funds in January, with the cryptocurrency reaching a record high of $73,798 in mid-March. As the situation with Mt. Gox unfolds, the broader context of regulatory developments and market adaptation will likely play a crucial role in shaping Bitcoin’s trajectory.