The past 3 weeks have witnessed a major event in address distribution, a mighty rise to ATH of non-Zero Bitcoin addresses, or the summation of all Bitcoin addresses containing at least 1 satoshi.
In the image depicted above, it can be seen that the last three weeks have seen a parabolic ascent of this metric, a parabolic ascent that is not present in any other metric regarding the distribution of addresses; in fact, for the most part they are declining or at best stable.
Numerous Bitcoin newspaper, Twitter and Telegram channels have portrayed this event as positive, as a sign of important Bitcoin accumulation by Retail investors, but is this really the case or can it be explained differently?
The above image shows the total block size of bitcoin. As is easy to see, a disproportion to the historical graph is evident. The Block Size has been growing steadily as transactions have increased, but for the past few days it has had an abrupt increase, doubling from the historical. Once again, why this anomaly ? How is it possible to explain everything ?
Ordinals’ responsibilities
As of January 21, 2023, the race for Ordinals, i.e., digital artifacts, has begun. Ordinals are created by enrolling sats, and to them are included content, such as an image, an HTML url, text, in order to keep these artifacts one must keep the transaction (UTXO), i.e., an unspent transaction.
If we apply a separator exactly on the date when the publication of Ordinals began here is where this anomalous movement of the distribution of non-Zero addresses is explained.
As always, onchain data tells objective data, while analytics is essential to really understand what is happening.
How will Ordinals affect Bitcoin ?
The past few hours have seen a major increase in transaction verification wait times, and an increase in transaction costs.
How sustainable is all this? What can we expect in the long term? We will explore this in more detail in the near future
Late in the US evening, as night came and asia woke up, a major Bitcoin Outflow from Binance.
A quick analysis showed some correlation between the news, a reopening to China’s cryptocurrency trading (https://www.cdex.cn/), and from the chart showing correlation with price:
Closed analysis? Not exactly. Onchain data is now within everyone’s reach, and similar movements can trigger euphoria and price movements, it has happened many times before . Manipulation is part of the system, and this is what has most likely happened.
Going to analyze the movement we can see that the outflow starts from a Binance address that is well integrated into the Binance ecosystem, i.e., any movement to and from occurred exclusively from and to Binance addresses.
What does not add up, and what makes this most likely an internal Binance movement, is that the outflow did not occur from the classic Hot Wallet, but occurred from a secondary Cold Wallet, emptied, and with the routing of the total amount of Bitcoins to a virgin address, but with a typical trace and repeatedly used by Binance to “mark” its addresses, this for example has happened before during Audits.
We can therefore regard it as an internal movement that has nothing to do with accumulation.
What should give pause for thought is yet another huge internal Binance move, from a known Binance address to a virgin address, in the middle of the European night and late in the U.S. evening with markets closed, with no advance notice of movement.
The obvious attempts at manipulation, even in light of connections and mutual support with opaque onchain services, should make users reflect on which onchain services should be deemed trustworthy, transparent, and which ones lend themselves to power plays and collusion with the sole purpose of misleading users and draining them of their Satoshi.
On-chain data are interpretive, we have said repeatedly, but the enormous amount of data, public, analyzable remains a unique tool in the modern financial world. In a previous post we identified Bitcoin addresses from MicroStrategy, a Nasdaq-listed company that has abandoned dollar reserves to accumulate Bitcoin. In this post we will analyze a new Bitcoin address traceable to MicroStrategy (MSTR).
The suspicion was that this address was owned by MicroStrategy, but without proof. Since the last release of Form 8-K (a form used to notify investors in U.S. public companies of specific events that might be important to shareholders or to the U.S. Securities and Exchange Commission) we have been able to identify that address as an additional address traceable to MicroStrategy.
The document mentions :
MicroStrategy, together with its subsidiaries, increased its bitcoin holdings by 2,500 bitcoins, from approximately 130,000 bitcoins as of October 31, 2022, to approximately 132,500 bitcoins as of December 27, 2022.
On December 23, 2022 large Bitcoin movements occurred from the addresses of OKX, one of the largest exchanges. The movements were anticipated by a tweet alert :
Due to wallet maintenance, we will be transferring coins and tokens between our wallet addresses over the next 24 hours. Large transfers will be seen in our wallets.
Address movements are part of an OKX transparency effort to show Proof-of-Reserves (PoR) on its website.
The Proof of Reserves is the second one, and it adds new features. Users can now view the independently the results of on the OKX website through open source tools available on the OKX GitHub profile at the following address:
OKX has published over 20,000 addresses, and it seems they plan to continue to reuse addresses so that anyone can perform a stand-alone, independent audit, plus OKX promises to run reserve tests on a monthly basis.
OKX Inflow Outflow may continue in the coming hours.
MicroStrategy and Bitcoin. Microstrategy is one among the leading Nasdaq-listed companies that has abandoned dollar reserves to accumulate Bitcoin. In this post we are going to analyze which addresses are most likely to be attributable to MicroStrategy.
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Onchain data are interpretive, but at the same time offer a huge amount of data, public, analyzable, and helping to identify with relative certainty who holds the private keys to a Bitcoin address.
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Much information that helps identify and confirm addresses comes from official sources, such as the SEC. In one of the latest reports published by MicroStrategy on the SEC website dated September 20, 2022 it mentions :
As of September 19, 2022, MicroStrategy, together with its subsidiaries, held an aggregate of approximately 130,000 bitcoins
We therefore know from official documents, with certainty, that on September 19, 2022, MicroStrategy, owned about 130,000 Bitcoins. We then analyze the chart with addresses above 100k provided on our website:
We have to date 4 addresses greater than 100k, of which 3 are officially traceable to Binance, addresses certainly owned by Binance officiated by multiple sources. That leaves only one with 137,000 as of September 19, 2022, which is 1LQoWist8KkaUXSPKZHNvEyfrEkPHzSsCd is MicroStrategy?
The analysis of address 1LQoWist8KkaUXSPKZHNvEyfrEkPHzSsCd often pales balances that correspond with what MicroStrategy officiates through SEC reports. Address 1LQoWist8KkaUXSPKZHNvEyfrEkPHzSsCd is a probable change of address 1P5ZEDWTKTFGxQjZphgWPQUpe554WKDfHQ traceable to the same owner, and has connections to address 1FzWLkAahHooV3kzTgyx6qsswXJ6sCXkSR
A cross-reference of the two addresses brings confirmation, namely, that often the sum of the two addresses almost faithfully met the balances reported to the SEC and by Tweets.
Analyzing the latest SEC memo, we know that MicroStrategy owns “approximately 130,000 Bitcoins, which corresponds to what we see in the balance, or 137.845 BTC
Some analysts criticize and deny the possibility that the address 1P5ZEDWTKTFGxQjZphgWPQUpe554WKDfHQ before and consequently 1LQoWist8KkaUXSPKZHNvEyfrEkPHzSsCd after is the address traceable to MicroStrategy, and this is explained as “the address 1P5ZEDWTKTFGxQjZphgWPQUpe554WKDfHQ was active before MicroStrategy started buying Bitcoin,” and this is absolutely true, but it can be explained.
MicroStrategy and its subsidiaries, according to multiple sources, use CoinBase both as an OTC (Over the counter buying and selling) service and, more importantly, as a custodial service.
A cross-check of address balances and communications from the SEC, MicroStrategy, and Saylor’s Tweets confirm that addresses 1LQoWist8KkaUXSPKZZHNvEyfrEkPHzSsCd , 1P5ZEDWTKTFGxQjZphgWPQUpe554WKDfHQ and 1FzWLkAahHooV3kzTgyx6qsswXJ6sCXkSR are controlled by CoinBase and are Bitcoins traceable with high probability, almost certainty, to MicroStrategy, and that the Bitcoins in the balance are wholly or close to 100 percent traceable to MicroStrategy.
Late in the evening of December 14, 2022, an address that had been dormant since 2017 awoke and executed outgoing transactions.
The address 1E278SJDBAuCEJX9LNfwK5AwkViG5edStx is a Legacy Address (P2PKH – Pay To Pubkey Hash) and has performed splits to SegWit addresses.
Address bought in April 2017 when Bitcoin was trading at $1,333 for a total expenditure of $801,203 for a net gain today of nearly $10 million ($9,900,692).
Onchain analysis indicates that Bitcoins were purchased on Bitfinex, while outbound transactions are likely a rotation to Segwit addresses. There are no apparent Inflows to Exchange at this time, but we will follow up in the coming hours and communicate any noteworthy updates if necessary.
Movements are still taking place, so onchain analysis is done with updated data until the post is published. Follow the live data (find the menu at the bottom of the page) to stay updated in real time.
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In the last 48 hours, a significant amount of Bitcoin have flowed out of Binance, large amounts that deserve a closer look.
We can certainly call the outflows “anomalous,” anomalous because the anomalies are multiple.
In our short history (the first BtcInOutAlert data were published in May/June 2021) we have been able to verify several outflows and accumulations, the most important one certainly in July 2021. The accumulations that have occurred to date that have led to lasting rebounds have distinct characteristics:
occur from multiple exchanges
outflows are often few transactions of large amounts (even above 5000 Btc)
occur and continue during the correction (i.e., dutante the descent)
The characteristics of the outflows of the last 48 hours have none of the peculiarities that have occurred in the past, namely:
have occurred exclusively from Binance. In the last 60 hours Bitcoin have outflowed almost exclusively from Binance (we are close to 100%). Other exchanges have not had Outflow, in fact Netflow is often positive (more inflow than outflow)
transactions are very numerous, and of amounts almost all (97%) less than 200 Btc per transaction
occurred days after the end (to date) of the descent/correction, and not during the descent/correction
The type of ouflow should therefore prompt the user to ask questions.
By looking at the Report data, it is possible to view aggregate data, i.e., the numbers displayed are the difference between inflow and outflow of ALL Exchange Spots we track.
The Weekly value starts at midnight Monday. 50,000 Bitcoin have left the exchanges in the past 60 hours. As of 00 UTC Monday (i.e., about 60 hours ago) there were 97,192 Bitcoin in the Binance Withdrawals Wallet (bc1qm34lsc65zpw79lxes69zkqmk6ee3ewf0j77s3h); right now there are 43,373 Bitcoin, for a negative balance of -53,819 Bitcoin.
The totality of outflows present are attributable to Binance, certainly an important anomaly.
Analyzing outgoing transactions from Binance Hot Wallet we see that, again in the last 60 hours, a total of 2040 outgoing transactions occurred , of these 2040 as many as 1970 are outgoing transactions of less than 200 BTC, or almost 97%.
We can therefore say that the totality of outgoing transactions are transactions of less than 200 Bitcoin.
WARNING! 97% of the transactions are less than 200 Bitcoins does not mean that they are individual 200 Bitcoin Outflows, but that the total is 200 Bitcoins, but then each transaction is also distributed to hundreds of different addresses.
As always, we simply pose evidences; the conclusions are up to the user.
A rather anomalous outflow movement from the Binance Hot wallet has occurred in the past few hours. Over 38,000 Bitcoin (About $661 million) have been transferred out of the Binance wallet in just 48 hours. As can be seen on every timeframe, the Outflow is way out of scale.
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An abnormal event in a short period of hours, all the more so at the current price level, especially from one exchange : Binance.
Source : https://btcinoutalert.net/Live-Report/
All Bitcoins are coming out of the Binance Hot Wallet, a single address : bc1qm34lsc65zpw79lxes69zkqmk6ee3ewf0j77s3h
In recent hours there have been unhappy reports about Binance and its possible failure to cover. We will be following very very closely in the coming hours; we may be at the beginning of something very very important.
Outflow movements are still occurring, so new updates will follow.
As explained in the previous post (which you can read here if you haven’t), a mysterious user named OneSignature appeared on the BitcoinTalk forum, a historic forum where there are numerous Satoshi posts, signing an address with bitcoin mined in 2009 and an outgoing transaction in 2011. The address (1NChfewU45oy7Dgn51HwkBFSixaTnyakfj) has block mining TX 1018. The signature is the most dated/oldest ever to appear on a bitcoin address.
The (few) certainties
Let us start with the few certainties, namely the signature and its verification.
We have noticed some unnecessary discussions about the supposed invalidity of the signature, and let’s settle that right away; the signature is authentic. We used Electrum connected to a Bitcoin full node, but you could use hundreds of other different methods; the signature is certainly authentic. After making sure that the signature is authentic, let’s take a closer look at the blockchain to understand more about it.
The analysis of blockchain
The address signed by OneSignature contained 50 Bitcoin that are aggregated to the address 1LseHYUYUXkL4Jdd4YTTXvWNqDceTdQXrt along with another 1,950 BTC, this occurs in 2011.
From signed address to aggregation
The Bitstamp inflow
Next, some transactions occur that deserve attention for analysis. Some Bitcoin are deposited at the address 17jz6XcXP2LPqS8gYmT2pkNJocUDzbpQuM traceable to a Bitstamp.net deposit address. On the same deposit address it is also possible to reconstruct most of the additional addresses owned by the same owner.
A total of 9,106 Bitcoins are deposited at the Bitstamp address, all transactions traceable to the same owner, and deposit activity occurs through December 22, 2014. Almost all of the Bitcoin are mining rewards.
From MtGox further transactions to the address 1QY4sSvRw2jS6QPn7GjYLaWwW73u8MLsb traceable to SilkRoadMarketplace, the famous Darknet marketplace for which Ross Ulbricht is now serving a life sentence.
Below is a complete representation of the flow.
We can exclude that OneSignature is Satoshi
Satoshi is a careful person, manic about privacy. The chances that OneSignature could be Satoshi in my opinion are ZERO. Satoshi would never, with such superficiality, leave such obvious traces, especially to two CEX exchanges that can easily identify his identity. It is not in his philosophy and it is not in his way of acting, always attentive to every single detail since the early days and he would never have committed such trivialities.
But we continue to explore further
Patoshi signature
If all these clues are not enough, further verification clues may come from independent researcher Sergio Demian Lerner. It has carried out an in-depth analysis on the possible blocks extracted from Satoshi, they are vulgarly called Patoshi Block.
Explained in a very simplified way, Satoshi most likely used a different mining software than the one initially distributed, so it was possible through traces left behind in block mining to reconstruct what are most likely blocks mined by Satoshi.
If we go to analyze block 1018, which is the one precisely signed by OneSignature, it does not show up among the possible Satoshi extracted blocks:
Screenshot Source : http://satoshiblocks.info/
Conclusion. Where did that signature come from and why? The possible idea of NFTs
One of the most likely explanations is that someone may have sniffed out a business opportunity: converting old BTC addresses to NFTs and then selling them. Such old types of addresses may acquire archaeological value. You may not even need to own the private key to own the NFT. You can learn more about the idea in this post. https://bitcointalk.org/index.php?topic=5425241
An idea that I think is difficult to develop, but which confirms for us a doubt:
