Eric Balchunas predicts that Satoshi Nakamoto may soon lose the title of the largest Bitcoin holder due to rapid accumulation by U.S.-based Bitcoin ETFs. Meanwhile, a wallet holding over $2 billion in Mt. Gox Bitcoin recently initiated a test transfer, which suggests that the creditor repayments are still underway. There are, however, some concerns about possible sell pressure in the market after 29,206 BTC, which has been inactive for close to three years, was transferred on-chain between Aug. 11 and 12.
Satoshi Nakamoto's Bitcoin Dominance Under Threat
Eric Balchunas, a senior ETF analyst for Bloomberg, has made a prediction regarding Bitcoin's largest holder. He forecasts that by the end of this year, Satoshi Nakamoto, who is the elusive creator of Bitcoin, is likely to lose the title of the biggest Bitcoin holder.
This shift is expected to happen as U.S.-based Bitcoin exchange-traded funds (ETFs) rapidly accumulate the cryptocurrency. In fact, these ETFs already hold a combined total of 909,000 coins. BlackRock's IBIT alone holds about 347,767 coins, making it the third-largest Bitcoin holder.
According to Balchunas, BlackRock could become the largest holder by late next year and maintain that position for quite some time. Some other large Bitcoin holders include MicroStrategy, the U.S. government, the Chinese government, and Robinhood.
Despite the widespread belief that Satoshi Nakamoto owns around 1.1 million coins, some debate exists about the accuracy of this figure. BitMEX Research suggests that the actual number could be closer to 700,000 Bitcoins, based on their analysis of mining activity.
Satoshi's massive Bitcoin fortune has long been considered a potential risk to the cryptocurrency’s stability, and there are some concerns about its impact on Bitcoin's monetary integrity. However, the coins associated with Nakamoto have remained untouched for over a decade. While it is unlikely that a sudden sell-off will happen, the possibility of a "dead man's switch" mechanism is still a possibility. If Satoshi's heirs were to start liquidating large amounts of Bitcoin, it could have huge ramifications for the market.
Wallet Holding $2B+ in Mt. Gox BTC Initiates Test Transfer
Larger BTC holders are also increasing as Mt. Gox continues its repayments to creditors. A crypto wallet that recently received $2 billion in Bitcoin from Mt. Gox's trustee conducted a test transaction on Tuesday. According to blockchain analytics firm Arkham, this was done in preparation for distributing funds to creditors.
Analysts at Arkham suggest that the wallet that initiated the transfer likely belongs to BitGo, which is a crypto custody platform and one of the five service providers responsible for distributing tokens to Mt. Gox creditors. BitGo is reportedly the last remaining distribution partner.
This test transaction happened after a large transfer of 33,100 BTC, which was worth about $2.2 billion at the time, was peformed by a Mt. Gox cold wallet holding creditors' funds two weeks prior. Arkham shared some details about identifying the wallet as BitGo, and explained that the address was clustered with other inputs known to belong to BitGo because of its custody structure and the types of wallets used. They also used a process of elimination as they already identified the other service partners involved in the Mt. Gox distributions.
Some users on a Reddit channel dedicated to Mt. Gox creditors reported that they received funds in their BitGo accounts.
Mt. Gox was once the largest Bitcoin exchange, but collapsed in 2014 after a hack. The ongoing distribution of over 140,000 BTC and Bitcoin Cash has been a big concern for investors, who worry that creditors might sell the assets to realize profits after waiting for a decade.
The trustee managing Mt. Gox's assets started distributing tokens in early July, which coincided with Bitcoin prices dropping below $54,000. The exchanges approved for creditor repayments include Bitbank, BitGo, Bitstamp, Kraken, and SBI VC Trade. According to Arkham data, Mt. Gox addresses currently hold close to 46,000 BTC, down from 141,000 BTC on July 1.
Mt. Gox BTC holdings (Source: Arkham Intelligence)
Dormant BTC Move Could Trigger Selling Pressure
A recent $1.7 billion movement of dormant Bitcoin could increase selling pressure in the crypto market, according to an on-chain Bitcoin analyst. In an Aug. 13 post on CryptoQuant, the pseudonymous trader XBTManager reported that 29,206 Bitcoin, which has been inactive for close to three years, were transferred on-chain between Aug. 11 and 12.
Specifically, 18,536 BTC that was dormant for 2-3 years was moved on Aug. 11, which ended up creating noticeable pressure on Bitcoin’s price. A further 5,684 BTC that was inactive for 3-6 months was also shifted later that day. On Aug. 12, 4,986 BTC that was dormant for 3-12 months and 2,394 BTC that was inactive for 3-5 years were moved on-chain.
XBTManager post (Source: CryptoQuant)
According to XBTManager, the movement of long-dormant Bitcoin often leads to increased selling pressure, particularly in times of low liquidity, potentially driving prices down even more.
Despite this, IG Markets analyst Tony Sycamore offered a more optimistic outlook in an Aug. 14 investment note. Sycamore pointed out the improving macroeconomic conditions after a recent $500 billion crypto market sell-off and suggested that Bitcoin could extend gains towards $70,000, driven by improved risk sentiment and lower U.S. yields.
In an Aug. 13 market report, Glassnode analysts described the current market as being marked by uncertainty but still found that there is a growing preference for holding among Bitcoin investors. They saw that after Bitcoin hit a new all-time high in March, the market experienced "supply distribution," where funds were being moved frequently. However, recent trends suggest a shift back towards accumulation, particularly among large wallets often associated with ETFs.
Cipher Mining Boosts Revenue and Cash Reserves in Q2
Meanwhile, U.S.-based publicly traded Bitcoin miner Cipher Mining reported a net loss of $15 million for the second quarter of 2024, which is higher than the $13.2 million loss reported in the same period last year. Despite the growing losses, the company has seen increases in its revenues, cash reserves, and power supply.
Second-quarter revenue rose to $36.81 million from $31.22 million a year ago, while the cost of revenue decreased to $14.28 million from $15.87 million. The company's cash and cash equivalents reached $122.56 million, up from $86.11 million at the end of 2023, driven largely by the issuance of $163.28 million worth of common stock.
Cipher Mining also reported a current hashrate of approximately 8.7 EH/s, and now plans to expand to 13.5 EH/s by the end of 2024 and 35.0 EH/s by the end of 2025. This expansion comes after the company signed a deal to acquire three new energy sites with a combined power capacity of 1.5 GW.
In response to the Bitcoin halving in April, Cipher is expanding its capacity and exploring opportunities in the high-performance computing (HPC) sector. According to CEO Tyler Page, developing HPC infrastructure will complement the company's Bitcoin mining operations and strike a balance between the two business lines to generate long-term shareholder value.
