Mysterious transactions from a ‘whale’ wallet cause speculations among investors and amateur internet sleuths.
Holders of large amounts of bitcoin are known as whales. Why are they a reason of concern? They can send prices plummeting by selling even a portion of their holdings.
About 40% of bitcoin is held by about 1,000 users. What if they, in a collaborated movement, sell out some of their stocks simultaneously? It would be a nightmare for investors.
A major wallet, with 111,114 bitcoins at its peak, became the cause of speculations recently. The wallet was worth about $2.1 billion at the peak of BTC. Rumors began that this whale was looking to cash out after this year’s plunge in prices. The fire went wild. Reddit was overcame by speculators, enthusiasts and investors who were blinded by the gross amount that the wallet held.
All trying to answer the question: Bitcoin chunks from the wallet were divided and sent over time to 60,000 coins then to 30,000 / 20,000 / 10,000 / 5,000 / 500 and lastly 100 coins. Did the owner intend to sell them on the market?
Cross-examinations of wallets began. Trails were followed. Ultimately the dissection of manifold transactions led a user to believe that somehow, the wallet was related to the infamous SilkRoad owner and founder, Ross William Ulbricht. Ulbricht’s pseudonym on the site’s forums was “Dread Pirate Roberts” or “DPR” for short.
For the readers who don’t know, Silk Road was a darknet marketplace that was primarily used for drug purchasing and selling with bitcoin being the form of payment. It launched in February of 2011 as a marketplace.
The site’s administrator was DPR, or Dread Pirate Roberts, who later was identified as Ulbricht and arrested, convicted of money laundering, computer hacking, conspiracy to traffic fraudulent identity documents, and conspiracy to traffic narcotics by means of the internet in February 2015. He is currently serving a double life sentence plus forty years without the possibility of parole.
Surprisingly, the wallet is active but it cannot be DPR himself unless he is able to trade from prison or gave the key to someone else. But, one shouldn’t assume that Ross was DPR, or that he was the only DPR. Ulbricht’s defense maintained that Ross created SilkRoad, but was not the one operating it continuously.
“…there was more than one DPR, DPR’s identity changed over time, and there was a change very close in time to Ross’s arrest—all supporting Ross’s defense that he had been framed by the genuine DPR.”
– Joshua Dratel, Ross’s lawyer
Did the BTC make it to the exchanges? There is no way of knowing. There are some speculative tools to try to do blockchain analysis, but unless someone specifically tags the wallet address, no one knows. A public record of ‘de-anonymised’ BTC wallets has yet to come.