Why did the whale, dormant for 11 years, burn $8.3 million in Bitcoin?

▲ Bitcoin whale ©CoinReaders

The market is stirring as a Bitcoin whale wallet, dormant for 11 years, suddenly permanently burned $8.3 million worth of Bitcoin. Various interpretations are emerging, debating whether it was a simple mistake or an intentional supply reduction strategy, but the Bitcoin price, in fact, continues its bearish trend without any significant rebound.

According to the cryptocurrency media outlet Watcher.Guru on May 27 (local time), crypto analytics firm LookOnChain announced that an investor who had been dormant for 11 years sent 107 BTC to a burn address. The value of this amount is approximately $8.3 million. LookOnChain commented, “It's hard to believe that such a large amount of funds would be burned.”

The media first raised the possibility of a simple mistake. Early Bitcoin addresses often start with the number ‘1’, and the burn address in question also uses the same format. Accordingly, an analysis suggested that the wallet owner might have accidentally sent it to the burn address during the copy-pasting process.

Another possibility mentioned was an intentional supply reduction strategy. Eleven years ago, in May 2015, Bitcoin was trading at around $230 to $245. The 107 BTC currently burned was only worth about $26,215 at that time, but its current value has swelled to $8.3 million. The media pointed out that the investor might hold significantly more Bitcoin than this.

Generally, a decrease in supply can act as a factor for price increase, but the market reaction was cold. According to CoinGecko data, Bitcoin has currently fallen to the $75,000 level, recording a decline of about 7% over the past two weeks. The media analyzed that macroeconomic instability is having a greater impact on the market than the effect of supply reduction.

In particular, with recent inflation indicators reported higher than expected, coupled with rising oil prices and strong government bond yields, the possibility of interest rate freezes is increasing in the market. Furthermore, ongoing geopolitical tensions have dampened risk asset preferences, and this environment is limiting the rise of the overall cryptocurrency market, including Bitcoin.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*