Long-Dormant Bitcoin Whales Resuming Activity Could Rock Price Action, Analysts Say

The number of active Bitcoin (BTC) wallets, many of which have long been dormant, has seen an uptick that could herald some major market movements, Bloomberg reports Jan. 11.Bloomberg bases its report on data and analysis from crypto analytics startup Flipside Crypto, which sealed the backing of major crypto exchange Coinbase and veteran crypto venture capital firm Digital Currency Group (DCG) back in November.According  to Flipside, as of Oct. 2018, a high number of long-inactive Bitcoin  holders — defined as those that haven’t transferred their Bi

tcoin for  between six and thirty months — have begun to transfer their coins,  resulting in wallets active over the past month now holding around 60  percent of the coin’s circulating supply.Overall, the supply of  active Bitcoins has reportedly surged 40 percent since summer 2018. Eric  Stone, head of data science at Flipside, commented: 

 “It’s definitely a big shift. There’s more potential than usual for price swings.” 

 As Bloomberg notes, similar wallet stirrings preceded Bitcoin’s major  historical price volatility in both 2015 and 2017 — in the latter year,  the coin surged to all-time price highs of $20,000.

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Flipside’s data for the number of inactive Bitcoin wallets. Source: Bloomberg.com 

 Flipside CEO David Balter emphasized to Bloomberg that it is  long-time holders in particular, many of whom remained idle during the  volatile markets of the past couple of years, who are now back on the  active radar. Stone added that the trend could continue, saying: “we  have no reason to expect them to remain stagnant for another 2-plus  years.”As Bloomberg notes, tightly clustered ownership  of the top cryptocurrency — with around 1,000 wallet address reported to  own 85 percent of all Bitcoins — has engendered the industry moniker of  Bitcoin whales, whose sizeable holdings potentially confer a  consequential power to move markets.Last October — on  the cusp of the rising trend identified by Flipside — blockchain  research firm Chainalysis published its study into the 32 largest  Bitcoin wallets. Said wallets reportedly represent 1 million BTC, worth  close to $3.7 billion  to press time. Their data indicated at the time that only around a  third of so-called whales were active traders, and these had “net traded  against the herd, buying on price declines.” The study thus concluded  the so-called whales were not responsible for price volatility.