Bitcoin's Dormant Wallets Activate; Will it Shake the Market?

Revival of Dormant Bitcoin Wallets: Market Implications Unfold

A dormant Bitcoin (BTC) wallet, which hadn't seen any movement for over a decade and held 119 BTC valued at approximately $6.8 Million, initiated a transfer early Thursday, 4 July. The first transaction of about 76 BTC, worth around $4.4 Million, occurred at 7:11 a.m. UTC as per the blockchain explorer Mempool's records.

TheBlock took to X to share the news and associated details like Bitcoin holdings. 

Source: X

Subsequently, the wallet moved the remaining 43 BTC, equivalent to $2.5 Million, at 8:55 a.m. UTC. This latter transaction was still pending confirmation. The wallet had previously conducted a transaction on February 28, 2012, transferring 2.98 BTC, which was then valued at $15. 

At that time, the total balance of 119 BTC was estimated to be around $600, as highlighted by the on-chain analysis tool Whale Alert. At the press time, BTC was trading at $57,798.70, after a decline of 4.34% in a day with $1,138,866,945,650 in market cap and $37,498,263,370 in 24-hour volume. 

When comparing with the current price, the value of BTC the address transferred has surged more than 11,000 times since the funds were last moved in 2012.  

The motives behind these recent transactions are not clear, nor is the identity of the wallet's owner. Nonetheless, the on-chain activity suggests that the owner is amalgamating the 119 BTC into a new single address. 

Considering the identical amounts transferred and the timing of these transactions, it's plausible to assume that the BTC is still under the control of the original owner.

Other Dormant Account Holdings

According to BitInfoCharts, there are countless dormant accounts in the crypto space that hold a large amount of BTC and recorded activity in the last few days. 

One of the dormant accounts with a balance of 79,957 BTC, valued at approximately $4.613 Billion which is 0.40546% of the total supply recently recorded an activity. The address was inactive since March 1, 2011, and recently activated on June 27, 2024. 

Similarly, another address which holds 53,880 BTC worth around $3.109 Billion, accounting for 0.27322% of the total supply also recorded some movement in recent. Since May 28, 2014, the account was disengaged and initiated its latest transaction dated May 12, 2024. 

It’s Impact on Bitcoin Value? 

The specific reason behind the activeness of the dormant account isn’t clear yet but the action suddenly dropped the BTC price. In the past 7 days, the coin’s value declined from $62,028.07 on June 27 to $57,798.70 at the press time, indicating a 5.63% drop.      

Source: CoinMarketCap

The same pattern was observed somewhere in January 2024 just after the approval of the spot Bitcoin ETFs. Approximately 5000 dormant BTC woke up due to which BTC's value declined from $46,354.79 to $39,936.82 within a few weeks.   

Conclusion

In conclusion, the recent movement of a long-dormant Bitcoin wallet, which transferred 119 BTC valued at approximately $6.8 million, has caught the attention of the crypto community. This reactivation is part of a broader trend where several inactive accounts have resumed activity, leading to speculation about the potential impact on BTC's market value. While the reasons for these transfers remain unknown, the pattern of dormant accounts becoming active has historically coincided with fluctuations in Bitcoin's price.

Also Read: Crypto News Today: Bitcoin Slides Below $60K Amid Sell