- This reserve was acquired in July 2021 when BTC was worth just $7.57.
- One analyst attributed these events to a sell-off-like liquidity crisis.
Nearly 500 Bitcoin (BTC), which had been dormant for nearly 12 years, was recently transferred to several new wallets, sparking curiosity in the broader cryptocurrency market.
According to Chen Luk, the stock was valued at $35 million at the time of this publication, having been acquired in July 2021. At that time, BTC was worth only $7.57.
At the time of writing no conclusive information was available regarding the entity and nature of the transfer.
However, if one goes by the populist belief that the wallet is preparing to sell, one would likely get a massive gain of 9247x.
A broader market trend?
AMBCrypto dug deeper and noticed a widespread trend of inactive coins becoming active recently.
Santiment’s Average Coin Age indicator, which measures the average number of days that all BTC tokens remain at their respective addresses, fell steadily throughout March.
What could be the reasons?
In fact there could be several factors behind the sudden rise of older Bitcoins up the chain.
First, it may be possible that the wallet holder could not access his BTC due to a lost private key or a cold wallet. Once they get the keys, they start mining Bitcoins.
However, such examples are very few.
Secondly, many long-term holders (LTH), who have been patiently waiting for the Bitcoin price to rise sharply, may eventually decide to sell and lock in profits.
Ki Young Ju, CEO of on-chain analytics company CryptoQuant, attributed recent incidents of ancient coin movement to Bitcoin’s sell-side liquidity crisis.
For starters, a liquidity crisis on the sell side occurs when there are not enough Bitcoins to buy. This usually happens when demand far exceeds supply.
With the introduction of spot ETFs, demand for Bitcoin, especially from institutional investors, has remained consistent.
Read Bitcoin (BTC) Price Prediction 2024-25
On the other hand, the production of Bitcoin has not been able to meet this demand, leading to a supply shortage for trading.
Because of this, ancient coins may begin to circulate in hopes of capitalizing on the increased demand.
This is an automatic translation of our English version.