Yesterday, a Bitcoin whale offloaded $8 billion of Bitcoin to Galaxy Digital.
This has significant implications, all negative, even though the ‘crypto media’ is trying to spin it as a positive. How is increasing the supply ever a positive? Why else are stock buybacks bullish? Because they reduce the supply. Conversely, stock offerings are a negative because they increase this supply. This is not even econ 101. It’s common sense.
Estimates are that “between 2.3 million and 3.7 million Bitcoins are permanently lost,” according to Ledger. I have never bought into this narrative that millions of coins are lost forever. It’s far fewer. Even Satoshi still has his keys.
Baked into the current BTC price is the assumption a certain percentage of BTC are lost forever. These old wallets being reactivated has a multiplicative effect in increasing the supply and hurting the price, even if not initially. The market will fall in anticipation of future selling and reactivations, far in excess of how much was reactivated.
Even Michael Saylor’s purchases are tiny relative to this hidden locked supply. There are not enough buyers to possibly sop up this new supply. Galaxy Digital buying up those $8 billion means less money for the next wave of sellers. Given Bitcoin has a market cap of $2 trillion, it will not take much quantity of sold Bitcoin to overwhelm even the biggest of potential buyers.
How hard is it to store piece of a paper. Or put the private key on a USB stick or something? If someone is smart or savvy enough to mine or otherwise procure a lot of Bitcoin early, it’s reasonable to assume that they are also capable of not losing the keys. Even in 2011-2012, 1,000+ BTC was still a decent amount of money. It’s not the sort of thing someone would just lose track of.