Mysterious Bitcoin Transactions Evoke Concerns of Imminent 'Sell-side Liquidity Crisis'
Summary:
CryptoQuant's CEO Ki Young Ju has identified a potential "sell-side liquidity crisis" within Bitcoin, following a mysterious consolidation of 2,000 BTC into one account, suggesting an over-the-counter sale. Furthermore, over the weekend, the fifth-richest Bitcoin account moved $6 billion worth of Bitcoin into three different wallets. In another incident, 26.9 Bitcoins were transferred to the Bitcoin network's first-ever wallet, from which retrieval is impossible. Finally, a dormant wallet containing over 1,037 Bitcoins woke up after 11 years and shifted out all its contents.
CryptoQuant CEO, Ki Young Ju has identified an alarming trend where an unknown individual or group has transferred and consolidated 2,000 Bitcoins into a singular account. This tactic could potentially expose a "sell-side liquidity crisis looming over old Bitcoin". Young Ju ascertains that the peculiar pattern of this transaction might imply an over-the-counter (OTC) sale. In an economically strained market, sell-side liquidity crisis indicates the paucity of readily available assets, which poses a challenge for sellers to find potential buyers or successfully carry out trading at favored prices. This condition significantly raises volatility and price inconsistencies.
On X, on March 26, an unknown individual or entity deposited 2,000 Bitcoins, originally obtained as mining rewards in 2010, into a single account, as noticed by developer Mononautical. This unidentified account holder consolidated the reward, which initially comprised of 40 batches each with 50 Bitcoins, into a single wallet.
Bitcoin miners are rewarded for validating blocks within the Bitcoin network. Initially, a single block bore 50 Bitcoins. However, approximately every four years, this reward splits into half. Around April 21, an expected Bitcoin halving will reduce block rewards from 6.25 Bitcoins to 3.125, though this date may shift.
At the time the undisclosed entity mined these blocks, the Bitcoin rewards were estimated about $600. Now, these rewards have escalated to nearly $140 million, according to Cointelegraph’s price index page.
Another notable Bitcoin transaction took place over the weekend, where $6 billion worth of Bitcoin was divided and transferred to three distinct addresses from the fifth-richest Bitcoin account. Blockchain analytics firm Arkham's data showed that the account was credited with 94,500 Bitcoins in 2019. This stash of Bitcoin stayed untouched until this weekend when it was distributed to new accounts, leaving behind a balance of only 1.4 Bitcoins ($99,000).
Earlier in January, someone transferred 26.9 Bitcoins (worth $1.2 million then) presumably from Binance to the first-ever wallet of Bitcoin network, the genesis wallet, notorious for its irreversible retrieval. Satoshi Nakamoto, Bitcoin's pseudonymous creator, initiated the genesis wallet.
In contrast, in July 2023, an idle Bitcoin wallet that possessed over 1,037 Bitcoins (worth $31 million then) unexpectedly sprung into action after 11 years and transferred out the entire stash.
Published At
3/27/2024 3:19:19 PM
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