Old Bitcoin whales are re-entering the crypto space after 10 years!
Around mid-July, the activation of a Bitcoin wallet containing 791 BTC ($25.7 million at a current market price of $32,500) was noted. This particular wallet had not been active for almost 10 years before showing this movement.
In another revelation, Bitcoins that were active back in 2012 are back on the market and their destination is quite unclear.
A recent CryptoQuant article mentions that the number of “old” Bitcoins entering market circulation escalated considerably as the first cryptocurrency took a dive below the $20,000 threshold.
Why have the ancient whales made a comeback?
The movement around previously dormant wallets, which were active 7-10 years ago, is a rare event in the cryptocurrency market. Traditional is increase in activity of ancient wallets can be monitored when the first cryptocurrency makes unprotected moves or reaches long-awaited targets or support levels.
Long-term owners may also join the sell side and start shedding their holdings to avoid further losses, given the uncertainty regarding the crypto market. In general, such a tendency outweighs the first signs of capitulation among investors.
If history repeats itself, we are likely to see a reversal in the cryptocurrency market soon.
Should market participants panic?
Block data shows that 5,000 10-year-old Bitcoins were transferred simultaneously. Despite the transaction’s relevance, it’s a relatively small transfer for such an old wallet.
Previously, similar wallets had moved up to 100,000 BTC in a short period of time, creating huge pressure on the market. There is hardly any reason to panic in such cases, even if the sum is larger, because the transfer can take place as part of a simple fund redistribution.
Investors also choose to divide their holdings into different wallets in highly volatile situations to manage their wealth more efficiently. But even if these funds are transferred for sale, such a large amount of the asset will go through an OTC trading desk instead of being dumped on the market.
WhaleAlert noted Ancient Wallet Activity
In a similar incident, in mid-July, a popular blockchain tracker – WhaleAlert – revealed wallet activity with respect to a long-dormant wallet. Notably, the dormant Bitcoin address in question was activated after 9.1 years of silence. According to WhaleAlert, 640 of those Bitcoins, worth over $20.8 million, were withdrawn from the account.
It can be concluded that Bitcoin early adopters profited from the investments they made in the asset class. In June 2012, Bitcoin was trading at $5.27, meaning the owner of the wallet got all 791 Bitcoins for $4,168.57. This gave the owner a return on investment of 616,418% in 9.1 years. This is reason enough for the whale to make a comeback.
No asset class, apart from Bitcoin, has produced this level of return in nearly 10 years. A number of people believe that Bitcoin is just getting started. Many have predicted the asset class to go as high as $500,000 for 1 BTC by 2025. Although this is just speculation, the Bitcoin network has truly helped revolutionize the world of finance and banking.
