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 it showed this movement.
In another revelation, the 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 “ancient” Bitcoins that entered the market circulation escalated significantly 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, that were active 7-10 years ago, is a rare event in the cryptocurrency market. Traditionally, the spike in the activity of ancient wallets can be monitored when the first cryptocurrency makes unprotected moves or reaches long-awaited targets or support levels.
Long-term holders might also join the selling side and start dropping their holdings to avoid further losses, given the uncertainty with respect to the crypto market. Generally, such a tendency makes up for 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 at the same time. Despite the relevance of the transaction, it is a relatively small transfer for such an ancient wallet.
Earlier, similar wallets had moved up to 100,000 BTC in a short period of time, creating enormous pressure on the market. There is hardly any reason to panic in such cases even if the sum is larger because the transfer could be done as a part of a simple fund redistribution.
Also, investors choose to bifurcate their holdings into different wallets in highly volatile situations in order to manage their wealth more effectively. However, even if those funds are transferred for selling, such a large amount of the asset will go through an OTC trading desk rather than being dumped on the market.
WhaleAlert noted Ancient Wallet Activity
In a similar event, in Mid-July, a popular blockchain tracker – WhaleAlert- disclosed wallet activity with respect to a long-sleeping wallet. Notably, the sleeping Bitcoin address in question was activated after 9.1 years of silence. As per WhaleAlert, 640 of these Bitcoins, worth over $20.8 million, were withdrawn from the account.
It could be concluded that Bitcoin early adopters were cashing in on their investment made into the asset class. In June 2012, Bitcoin was trading at $5.27 which means the owner of the wallet got all 791 Bitcoin for $4,168.57. This gave the owner a 616,418% return on investment in 9.1 years. This is enough reason for the Whale to make a comeback.
No asset class, except Bitcoin, has given this level of return in almost 10 years. A number of people believe Bitcoin is just getting started. Many have predicted the asset class to go as high as $500,000 for 1 BTC by 2025. Even though these are mere speculations, the Bitcoin network has truly helped to revolutionize the world of financing and banking.