A blockchain analyst observed this week that one of the earliest miners of Bitcoin (BTC) has been cashing out a crypto fortune (approx. 30,000 bitcoins) up until the height of crypto mania in January 2018 when the digital gold was trading near $20,000 USD. Which begs the question: Who is this mystery trader who just received a nine-figure windfall (perhaps tax-free) that’s comparable in size to the largest lottery jackpots ever?
London-based Antoine Le Calvez (Twitter @khannib) on Sept. 26 tweeted a graph of spending patterns of the earliest block rewards of Bitcoin and it’s no small amount. “An analysis of the spending patterns of the earliest blocks of Bitcoin seem to indicate that a very early miner sent around 30k BTC to exchanges from Dec 2016 to early Jan 2018.”
Calvez says the mystery trader started mining BTCs in Dec. 2009 although he says the start date could have been earlier than that. The anonymous individual was able to rack up thousands of bitcoins because block rewards back then were extremely high and virtually no one knew about the first-ever cryptocurrency.
Throughout 2009, Bitcoin traded for literally nothing. In March 2010, it traded for $0.003 and rose to $0.08 by July 2010. While the difference seems like a meager financial gain, it actually represents a 2,566% increase that would have turned an original $100,000 investment into $2.66 million.
According to Calvez, the miner is knowledgeable enough to cover his tracks: “This miner has been cautious enough to first spend the youngest blocks in their possession as to not reveal the extent of their mining period too much. So far, it seems it started mining around Dec 2009, but it could have been earlier.”
To be clear, Calvez doesn’t think it’s Satoshi Nakamoto, the enigmatic person or entity who published the whitepaper on what would eventually become the most disruptive invention in modern finance. While there have been speculations as to the real identity of Nakamoto, he/she remains anonymous to this day.
It’s been widely believed since 2013 that Satoshi Nakamoto owns about one million bitcoins in addition to similar number of forked coins such as Bitcoin Cash (BCH) and others. But an Aug. 2018 analysis by Bitmex Research puts the token bullion at no more than 700,000 bitcoins (plus the forked coins). “Even if one is convinced, the evidence only supports the claim that the dominant miner may have generated significantly less than a million bitcoin in our view,” the firm wrote in a blog. “Perhaps 600,000 to 700,000 bitcoin is a better estimate.”
At $6,700 that many bitcoins (700,000) would be worth $4.69 billion not including the value of forked coins. In February 2011, Bitcoin achieved 1:1 parity with the U.S. dollar (valued at $1) and skyrocketed to $31 in July 2011. However, it dropped to $2 in December that year. Its value in June 2013 was around $100. At $15,000 price levels, the miner’s 30,000 bitcoins would have been worth $450 million.
Most bitcoins (55%) sit in wallets that have 200 coins or more and worth at least $1 million when Bitcoin is at $5,000 according to Sept. 2018 analysis by Diar.co. The firm also found that more than 87% of bitcoins are stored in wallets that are above 10 BTCs.
Many investors are long-term holders (or “hodlers” in industry parlance), the same study found. “An amazing 42% of Bitcoins held in such investment wallets (above 200 BTC) made no outgoing movement during the price peak in December 2017 – and sat in wallets before the markets saw the near $20k BTC. And 27% of these Bitcoin wallets have continued to add more coins to their stash since then.”
Articles by Marvin Dumont: