Dormant Bitcoin now caters to the largest ever amount of BTC
For different reasons, some Bitcoin (BTC) addresses have been known to not transact for years despite holding a large sum of money in the digital asset, throwing the addresses into a dormant state.
Notably, the number of Bitcoin held in such addresses continues to grow. As of August 22, the cumulative number of Bitcoins held in dormant addresses over the past five years hit an all-time high of 17.87 million BTC, data by bitinfocharts noted.
According to the data, Bitcoin in dormant addresses represents over 90% of the 19.12 million BTC currently available. The top-ranked dormant address has 79,957 BTC worth approximately $1.6 billion based on Bitcoin’s market value of $21,200 at press time. Cumulatively, the top five inactive addresses hold 185,096 BTC worth $3.9 billion.
Notably, a dormant Bitcoin address refers to addresses with no outgoing transactions for a certain period with a non-zero balance. Several factors explain the dominance of these addresses.
Drivers for inactive accounts
The HODLing investment strategy accounts for a significant share of addresses. Notably, despite the volatility associated with the cryptocurrency market, several investors are betting on a future rally to cash in.
It is also worth mentioning that cryptocurrencies have emerged as a way to make quick profits despite market corrections.
Additionally, some inactive accounts contain inaccessible funds, mainly due to the loss of private keys or the physical wallet. It is possible for individuals to forget or lose their passwords and end up losing their cryptocurrencies. Therefore, holdings of top dormant BTC addresses may belong to this lot.
Elsewhere, stolen coins are mainly due to incidents such as the hacking of the accounts of part of the inactive addresses in an attempt to avoid investigations. It should be noted that in recent years, despite the anonymity of cryptocurrencies, investigators have managed to trace stolen funds by tracking their movements from one address to another.
Role of early investors
Additionally, some of the wallets date back to the earliest eras of Bitcoin. Early holders who invested in the asset and maintained their stakes became Bitcoin whales. The reactivation of these wallets has an immense impact on BTC market trends.
For example, the movement of Bitcoin from old, inactive wallets occurs during a bull run for owners to maximize profits in return, causing market volatility.
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