Dormant Wallet Filled with Old Bitcoins Comes to Life Slumping Crypto Prices

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by Polina Chernykh · 3 min read
Dormant Wallet Filled with Old Bitcoins Comes to Life Slumping Crypto Prices
Photo: Pixabay

Despite a plenty of speculation among the cryptocurrency community members, it is still unknown who is the owner of the mysterious bitcoin wallet.

After four years of being dormant, an old digital wallet, containing 111,114 bitcoin worth around $900 million, is suddenly active again. The giant, holding about 0.52% of the total bitcoin supply, has transferred more than $100 million to Bitfinex and Binance exchanges over the last few days in late August.

The sudden movement of coins has provoked rumors within the crypto community regarding the possible owner of the old wallet. As suggested by the Redditor u/sick_silk, who first noticed an activity of the sleeping wallet, the money belong to either the now-defunct dark web marketplace Silk Road or the failed virtual currency exchange Mt. Gox. The Reddit user tracked each transfer on the blockchain network and provided detailed graphs showing the wallet’s activity.

The first post, published on August 31, suggested the money stem from Silk Road, an anonymous platform for trading illegal items like weapons and drugs.

“It seems that the owner of a huge SilkRoad related wallet is moving funds actively since 3 days, dividing it in chunks of 100 coins by subwallets. The original wallet owned 111,114.62 BTC / BCH , which is currently valuated ~ $844M (without taking in account other #Bitcoin forks). Last movements on these subwallets are 4 years and 5 months old (March 9th, 2014). The chunks have been divided over time to 60,000 coins then to 30,000 / 20,000 / 10,000 / 5,000 / 500 and now 100 coins,” u/sick_silk wrote.

After conducting more thorough research, u/sick_silk claimed the funds may as well come from Mt. Gox wallet. The suggestion echoed views expressed by specialists from the bitcoin security company WizSec.

When asked about the money source by another person, WizSec replied: “An old Mt Gox whale — Not suspicious in itself, just someone who made a very good investment — Not belonging to Mt Gox, just someone who bought them on Mt Gox back in the day.”

Some even connected the wallet’s owner to Dread Pirate Roberts, the Silk Road’s creator, also known as Ross Ulbricht. However, this is very unlikely as Ulbricht was sentenced to life imprisonment after Silk Road’s closure.

According to a blockchain research company Diar, more than half of the world’s bitcoin circulating supply is now controlled by cryptocurrency whales, what is less than 1% of all wallet addresses. This means over 55% of bitcoin supply is held in wallets with balances of over 200 BTC ($1.25 million). What is impressive, a third of all bitcoins owned by whales has never been touched. Even when the cryptocurrency hit $20,000 in December, 2017, 42% of wallets made no outgoing transactions.

u/sick_silk believes the sudden transfer of the dormant funds could have a negative impact on crypto prices and bitcoin in particular, impeding its further growth. The latest activity, the Redditor says, may be a reason for the cryptocurrency decline recorded in August.

Altcoin News, Binance News, Bitcoin News, Cryptocurrency news, News
Polina Chernykh

Polina is an undergraduate student at Belarusian State Economic University (BSEU) where she is studying at the faculty of International Business Communication for a degree specializing in Intercultural Communication. In her spare time she enjoys drawing, music and travelling.

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