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Dormant Bitcoin [BTC] ‘whale’ addresses witness surge in activity




Dormant Bitcoin [BTC] 'whale' addresses witness surge in activity
Source: Pixabay

Addresses holding Bitcoin that haven’t been active for over six months to almost two and a half years are now moving BTC, the data compiled by analytics firm Flipside Crypto shows. Sixty percent of BTC in circulation right now is held by wallets that have been active in the past month. Bloomberg reports that similar wallet activity led to the wild price swings in the years 2015 and 2017.

BTC price now hovers near the $3600 mark. It is believed that about 1,000 addresses hold 85% of all existing Bitcoins. There are some behemoths out there, addresses that might hold millions of dollars worth of Bitcoin. These are called whales, many of which have remained quite inactive. However, the waking of these dormant whales might move prices either way, by either instigating fear or might inspire hope and belief in investors, depending on whether the whales buy or sell.

Eric Stone, Flipside Crypto’s head of data science, said:

“It’s definitely a big shift. There’s more potential than usual for price swings.” He also added that there is 40% more active BTC now that in the summer of 2017.

Source: Flipside Crypto


Source: Flipside Crypto

The CEO of Flipside, David Balter, told Bloomberg:

“We’ve definitely seen that many long-time holders of Bitcoin are becoming active.”

The number of inactive accounts has halved, and there was a sudden surge in the number of accounts that participated in BTC transactions. While this might be similar to 2017, as pointed out by Stone, there is nothing to suggest that this time, too, BTC prices will be positively impacted.

It all hinges on whether the holders buy or sell, and how the community and Bitcoin investors react to market activity. Whales selling BTC might be catastrophic, whereas whales buying could drive demand, and prices, upward.

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A fourth year engineering student at SASTRA, working freelance at AMBCrypto. Writing and football are passions, and cryptos are an avid interest.


Is the scarcity principle a factor in Bitcoin’s valuation or is it just crypto white noise?

Biraajmaan Tamuly



Is Bitcoin being scarce changes the way we put forward its valuation or is it just Crypto white noise?
Source: Pixabay

The aspect of scarcity is fundamental to the Bitcoin community, with its limited availability often seen as a virtue in a world where governments have unlimited power to print fiat currencies. With the value of Bitcoin increasing day by day, the virtual asset is getting close to its saturation point.

At press time, 17,763,712 BTC were in supply, very close to the 21 million Bitcoin supply cap. However, the last BTC will be minted on 7th May 2140. That is almost 100 years from now. So, there is still a significant period of time before Bitcoin’s production halts for good.

Many in the community have suggested that Bitcoin’s scarcity has genuine value because it makes the virtual asset “deflationary.” In light of Facebook’s announcement of “Libra” coin, it has been argued that it will not generate any circumstantial threat to Bitcoin, solely on the fact that Bitcoin was scarce and Libra was not.

A recent Medium article released by Forbes summed up the scenario. It stated,

“It will take time, but Facebook will greatly accelerate the pace of teaching people about cryptocurrencies. And when this happens, more people will turn to bitcoin for one simple reason — bitcoin is scarce, while Facebook’s cryptocurrency is not.”

Another aspect that explains the importance of Bitcoin’s scarcity value is its comparison with Gold, which is also a scarce commodity. A key model that explains Gold’s intrinsic value in the market is the Stock to Flow ratio.

The S2F ratio of a commodity explains the scarcity value as it is the amount of an asset that is available to the amount that is produced annually. Moreover, the higher the S2F value of an asset, the lesser the inflation rate attached to it. At press time, Gold had the highest S2F value, but Bitcoin was close behind and it was stated that by August 2020, Bitcoins S2F’s value would be 55.2 to Gold’s 62.

However, a significant counter-argument against Bitcoin’s scarcity in the community was put forth, with none other than legendary investor, Warren Buffet, claiming that Bitcoin had no “intrinsic value.”

Recently, Peter Schiff, CEO at Euro Pacific Capital, explained that Bitcoin was not scarce due to the availability of other crypto-assets which made Bitcoin’s scarce value quite redundant since crypto assets, with better properties and characteristics, could be created anytime.

The argument was widely opposed by a majority of the community, with certain crypto-enthusiasts deciding to respond to the post. Twitter user, @Sisko8, said,

“The Mona Lisa is not really scarce, as there is an infinite supply of other paintings with identical or superior painting techniques that can be created out of 3$ paint and canvas, including photocopies of the Mona Lisa.”

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