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, bitcoins that were active back in 2012 are back in the market, and their destination is not quite as clear.
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 ancient whales made a comeback?
Movement around the previously dormant wallets, active 7-10 years ago, is a rare occurrence in the cryptocurrency market. traditionally, spike in activity Ancient wallets can be monitored when the first cryptocurrency makes an unsecured move or reaches a long-awaited target or support level.
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 very 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.
Prior to this, similar wallets surged to 100,000 BTC in a short period of time, creating huge pressure on the market. There is no reason to panic in such cases even if the amount is large as the transfer can be done as 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 notes ancient wallet activity
In a similar event, in mid-July, a popular blockchain tracker – Whale Alert – disclosed wallet activity in relation to long-time gold wallets. Notably, the bitcoin address in question was activated after 9.1 years of silence. According to Whale Alert, 640 of these bitcoins, worth over $20.8 million, were withdrawn from the account.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 has delivered this level of return in nearly 10 years, except bitcoin. Many people believe that bitcoin is just getting started. Many have predicted that the asset class will reach $500,000 for 1 BTC by 2025. Although these are mere speculations, the bitcoin network has actually helped revolutionize the world of financing and banking.
