Dormant Bitcoin now addresses the largest amount of BTC ever
For various reasons, some Bitcoin (BTC) addresses are known to have no transactions for years despite having a significant amount of money in the digital asset, causing the addresses to go dormant.
In particular, the number of Bitcoin held at such addresses continues to grow. As of August 22, the cumulative number of Bitcoins held in dormant addresses over the past five years reached a record high of 17.87 million BTC, data from Bitinfocharts indicates.
From the data, Bitcoin in dormant addresses make up over 90% of the 19.12 million BTC currently available. The highest-ranked dormant address has 79,957 BTC worth about $1.6 billion based on Bitcoin’s market cap of $21,200 as of press time. Cumulatively, the five dormant addresses hold 185,096 BTC worth $3.9 billion.
Specifically, a dormant Bitcoin address refers to addresses with no outgoing transactions for a certain period of time with a non-zero balance. Several factors explain the dominance in such addresses.
Drivers for dormant accounts
HODLing’s investment strategy accounts for a significant proportion of the addresses. In particular, despite the volatility associated with the cryptocurrency market, more investors are betting on a future rally to cash out.
It is also worth mentioning that cryptocurrencies have emerged as a means of making quick profits despite market corrections.
In addition, some dormant accounts involve unavailable funds, mainly through the loss of private keys or the physical wallet. There is a possibility that individuals may forget or lose their passwords and ultimately lose their cryptocurrencies. Therefore, holdings of the top dormant BTC addresses may fall under this lot.
Elsewhere, stolen coins are mainly due to incidents where hacking accounts for a proportion of the dormant addresses in an attempt to avoid investigation. It is worth noting that in recent years, despite the anonymity of cryptocurrencies, investigators have been able to trace stolen funds by tracing their movements from one address to another.
The role of early investors
Also, some of the wallets are from Bitcoin’s early eras. Early holders who invested in the asset and kept their holdings have evolved into Bitcoin whales. The reactivation of such wallets has a huge impact on the BTC market trends.
For example, the movement of Bitcoin from old inactive wallets occurs during a bullish run for the owners to maximize profits in return, causing market volatility.
Disclaimer: The content of this page should not be considered investment advice. Investment is speculative. When you invest, your capital is at risk.
