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In May, two Bitcoin wallets identified by analysts as being associated with Silk Road-era activity transferred a significant amount of cryptocurrency, and additional movements were noted on Dec. 10, indicating ongoing patterns of previously inactive supply, according to blockchain tracking information.
Summary
- Two Bitcoin wallets, dormant for an extended period and linked to Silk Road activity, moved over 3,400 BTC in May, with further consolidation noted on Dec. 10.
- Forensic analysis indicates that these funds, originating from wallets inactive since 2013, were sent to new SegWit P2WPKH addresses, which analysts interpret as a possible re-keying rather than preparations for sale.
- Market analysts observe that U.S. Bitcoin ETFs draw in considerable liquidity on a weekly basis.
The Digital Watch Observatory noted that transactions in May amounted to around 3,421 bitcoins, including a transfer of 2,343 bitcoins at block 895,421, which directed output to a new SegWit address, based on the observatory’s findings.
On-chain forensic investigations revealed 31 consolidated outputs being transferred to a new P2WPKH address, a structure that analysts claim aligns more with internal custody management than with an immediate exchange deposit.
Blockchain tracking indicated a further consolidation of funds on Dec. 10 from more than 300 wallets described as tied to the Silk Road darknet marketplace.
According to market observers, the difference between consolidation and transfers to designated exchanges such as Coinbase Prime influences trader reactions. Movements to Coinbase Prime or similar prime-broker platforms are viewed as potential short-term supply, and historical data shows that transfers from the U.S. government to Coinbase Prime in August 2024 and December 2024 often align with temporary risk-off behaviors.
The wallets involved in May’s transactions were established in July 2013 and had remained inactive for nearly 11 to 12 years before these expenditures, as per blockchain records.
In 2014, the U.S. Marshals Service auctioned 29,656 bitcoins seized from Silk Road, which venture capitalist Tim Draper acquired. Additional seizures included approximately 69,370 bitcoins associated with an individual referred to as “Individual X” in court documentation in 2020 and about 50,676 bitcoins from James Zhong in 2022.
Analysts examining these transactions noted that the consolidation to new P2WPKH addresses observed in May implies internal re-keying rather than immediate selling. Market analysts have presented probability estimates suggesting a 40 to 55 percent likelihood of internal custody management, 25 to 35 percent for over-the-counter sales via prime brokers, and a 10 to 20 percent chance of a market-driven de-risking scenario involving government transfers of 10,000 to 20,000 bitcoins coinciding with weak ETF flows.
Market participants keep a close watch on tagged receipts, especially at Coinbase Prime, following any new Silk Road-related activity, as noted by sources on trading desks. U.S. Bitcoin spot ETFs consistently absorb substantial liquidity weekly, indicating that Silk Road-related sales are unlikely to have a significant impact on prices without an additional trigger, analysts added.
The activity patterns observed in May and Dec. 10 suggest consolidation rather than distribution until exchange labels emerge, according to blockchain forensic experts.
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