In the last couple of weeks, Bitcoin had seen what seemed like a strong rally. Since August 10 and until September 4, Bitcoin price surged from $6,140 to $7,360. However, in the last two days, it plunged back to $6,405. There are many theories as to why Bitcoin has seen such a massive drop. One theory is related to a mysterious Bitcoin wallet (15ihHoGs3onQBNnEH8afDFGvou9nD62Hm7) that contains around $1.0 billion worth of Bitcoin and Bitcoin Cash. The wallet had been inactive for several years until a couple of days ago. Amid speculations regarding the ownership of the wallet and its activity, people seem to be selling Bitcoin. For now, it seems that Bitcoin is seeing a victory of FUD over HODL.
Silk Road or Mt. Gox Behind Mysterious Bitcoin Wallet
Silk Road was an infamous online black market, where people could buy drugs, weapons, stolen data, and other illegal things. In 2013, the FBI shut down the website and its founder Ross Ulbricht was arrested. Later he was tried and received five concurrent sentences, including two life sentences without the possibility of parole. If the Bitcoin wallet is really associated with Silk Road, then it can either be owned by someone from Ulbricht’s past associates, or by the FBI who seized Ulbricht’s laptop.
Another theory suggested that the mysterious Bitcoin wallet belongs to Mt. Gox. Japan-based Mt. Gox was the largest Bitcoin exchange in 2013 and 2014. In 2014 it was revealed that 850,000 bitcoins belonging to customers and Mt. Gox were stolen. Later it was discovered that the coins were stolen from Mt. Gox hot wallet over the span of three years. Following the revelation, Mt. Gox declared bankruptcy and was liquidated. In a statement issued on August 23, Mt. Gox issued a statement on its website, saying that affected users can file claims for their share of the stolen bitcoins. However, the statement does not specify the number of bitcoins it will refund.
It is unclear who does the mysterious Bitcoin wallet belong to. In a post on the Bitcoin forum, someone claims to have performed an analysis that ties the wallet number to Silk Road and to Ross Ulbricht specifically. Apparently, Ulbricht hid 600,000 coins in an offline wallet. However, since Ulbricht is in prison, the question still remains who is responsible for the latest activity.
HODLers Seem Spooked
According to the same Reddit post, the mysterious Bitcoin wallet contains around 111,110 coins in both Bitcoin and Bitcoin Cash. Currently is doing something strange. Apparently, the owner of the wallet is dividing the amount into subwallets with 100 coins that contain 100 coins each. The reason behind this move is unclear. However, there are reasons for Bitcoin investors to be alarmed. Aside from splitting the amount into subwallets, the owner of the mysterious Bitcoin wallet has also sold a small fraction of the coins.
So far, the owner transferred 14% of the holding into Bitfinex and Binance wallets, according to another Reddit post. Therefore, there is a possibility that at least these coins will be converted into another cryptocurrency or sold for fiat money. This 14% represents around 16,000 Bitcoins from the wallet and it’s unlikely to make affect the market significantly even if dumped all at the same time. However, if the owner decides to unload the entire amount on the free market, then Bitcoin price will likely suffer an even bigger drop. In the meantime, it seems like some owners of Bitcoin have decided to sell their coins, which has caused the drop we are witnessing now.