The sleeping whales are awakening as old Bitcoin wallets spring into life; 616% ROI achieved
There was a time, over a decade ago, when the Bitcoin community looked incredibly different from the massive stature and presence that it has inevitably risen to today.
Back then, in its early days, it was very club-like, and often featured either anorak-wearing technology enthusiasts huddling together in a Google campus in Buenos Aires, Tel Aviv or San Francisco marvelling at the latest Bitcoin ATM, or bow tie-clad mavericks leading said technology enthusiasts in what was then viewed as a democratic rebellion against banks and governments.
There was almost as much general interest as there is now, especially in nations with capital controls such as Argentina which was a huge center for the early advocacy of Bitcoin, but the difference is that the computer science wizz kids of the beginning of last decade were not the social media influencers of today.
They had access to mining infrastructure, often self-built, and had mined their own coins, and had stored them in a cold storage wallet without any notion of trading the huge waves of volatility that are now attracting all manner of people.
The values were of course much lower too. There was a time when even the enthusiasts thought that $200 for one Bitcoin was astonishing, which it was – there had never been a currency in widespread circulation that had ever got anywhere near that value.
Many of the early advocates locked their Bitcoins away, whether they had mined them using their own resources or acquired them and kept them on a sustainable exchange’s cold storage facility, avoiding the demises of various unregulated exchanges whose owners had run off with their investments.
Today, these are whales by pure circumstance. They are people who have a lot of Bitcoin, and have kept it out of circulation for years, however they are starting to awake from a long slumber, as exemplified this week by the activation of a long inactive wallet containing 791 BTC worth $25.7 million at a current market price of $32,500 after nearly ten dormant years.
Now that’s a good return on investment!
Among cryptocurrency enthusiasts, wallets such as these are referred to by the nickname “Satoshi-era” collections, and this particular one falls into that category, having been created in 2012 when the acronymic Satoshi Nakamoto was still being heralded as the main man of Bitcoin, its creator and leader of the digital asset movement.
Nowadays, this has been developed significantly, and there are several popular cryptocurrencies which are continually being rivaled by new ones that each have unique and interesting features that will move the digital financial services business forward, ranging from extensive smart contract functionality to special Proof of Work topography, as a result generating more opportunities all the time for people to become part of the cryptocurrency developments of the future.
Back then, things were much less developed, and this particular wallet, which was created in June of that year, just 14 months after the elusive and acronymic creator of the Bitcoin blockchain vanished from the internet.
There is, in this case, some degree of indication that some of the early adopters of Bitcoin are cashing in on their investment made into the asset class. As of June 2012, Bitcoin was trading $5.27 which means the owner of the wallet got all 791 Bitcoin for $4,168.57. This represents a 616,418% return on investment in 9.1 years.
That is in line with many enthusiasts at the time, who acquired Bitcoin by either mining which was much easier in those days or by exchanging fiat currency for cryptocurrency with a view to simply holding onto it. There were a large number of people who did that and have kept quiet whilst it rose in value.
When looking at this particular gain, there is absolutely no investment type, commodity or physical asset that has ever provided that level of return, making this an historic medium-term investment milestone.
Cryptocurrencies such as Bitcoin have been in existence for long enough for them to be now regarded as a long term investment by early adopters who are now realizing their assets.
Some speculate that it could be Satoshi Nakamoto withdrawing Bitcoins, but there are enough Generation X Bitcoin advocates from the early days to be considered whales in their own right and their strategy was to go long.
There are still hundreds of dormant early Bitcoin wallets with a lot of capital stored, and the cumulative sum in dormant addresses has rocketed over the past few months, largely due to the tremendous value increase in Bitcoin.
The interesting thing is that these are publicly available, and a full set of data exists around them, showing the address, how many Bitcoins they hold and the current value, with the top one, created in 2011, having over $2.5 billion of Bitcoin in it.
Interestingly, this was active today.
It may well be that these leviathans are waking from their slumber, and if so, this is an opportune time for them to say the very least.