Mystery of the $2 Billion Bitcoin Whale That Fueled a Selloff

Mystery of the $2 Billion Bitcoin Whale That Fueled a Selloff


When Bitcoin plunged as much as 15 percent over two days last week, a theory emerged -- where else? -- on the Internet: a whale was on the move.

Speculation mounted that a major holder of cryptocurrency with an electronic wallet that dated back to 2011 -- long before anyone had heard of HODL -- was moving to sell. His or her wallet had once had as many as 111,114 Bitcoins, which at their peak would have been worth about $2 billion. The rumors that began two weeks ago were that this whale -- as big holders are known -- was looking to cash out after this year’s plunge in prices.

Debates flared up on Reddit. Galaxy-like graphs were disseminated. And Bitcoin origin stories from Dread Pirate Roberts to Mt. Gox re-emerged.

The case has all the elements of a classic Bitcoin mystery: famous wallets, a vicious cycle of speculation reinforcing a selloff and intense amateur sleuthing on the Internet that might not have exactly hit the mark. It also shows what makes Bitcoin unique: the pseudonymous, public nature of its blockchain means anyone can attempt to trace transactions.

According to Chainalysis Inc., which provides cryptocurrency tracking tools to companies and law enforcement, 50 transactions involving a total of 50,500 Bitcoins originating from that whale’s wallet were moved between Aug. 23 and 30. Based on Aug. 22’s closing price in Bloomberg’s composite data, they would be worth about $320 million. Chainalysis said they cannot confirm that the coins entered exchanges.

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