The Silent Wave: How Dormant Bitcoin is Shaking the Market

A new analysis from research and brokerage firm K33 reveals that the once-slumbering supply of Bitcoin held by long-term holders is now seeing significant activity. This follows a prolonged phase of distribution, indicating a pivotal moment in the cryptocurrency’s evolution. With over 1.6 million bitcoins, valued at roughly $138 billion, re-entering the market, this surge suggests a critical distribution trend.

The Imprint of Declining Dormancy

K33’s report highlights a drop in Bitcoin that remained untouched in wallets for over two years, pointing to a significant shift from early hodlers turning into sellers. While upgrades like the transition to GBTC’s ETF format and address adjustments have played a role, these factors alone don’t account for the volume of awakened BTC.

During 2024 and 2025, the amount of long-held Bitcoin returning to the market is projected to rank amongst the highest in Bitcoin’s history, rivaled only by 2017. Unlike the ICO-fueled rally of that year, the current resurgence is driven by direct sales engaging a more evolved and liquid marketplace.

What is Driving Institutional Moves?

Key movements include the off-market transaction of 80,000 BTC through Galaxy and the conversion initiative involving 24,000 BTC into Ethereum. These transactions signal major liquidity events and might elucidate Bitcoin’s subdued trajectory as 2025 unfolds.

Demand from U.S. spot Bitcoin ETFs and interest from corporate treasuries have provided an accessible platform for long-term investors to cash out. K33 notes that approximately $300 billion worth of Bitcoin aged at least a year has cycled back into the market recently, reshaping pricing dynamics and decreasing the concentration of holdings.

Market projections suggest a tapering of sales pressure. Lunde notes strengthened distribution patterns, with about 20% of the entire Bitcoin supply reactivating over recent years. This trend is expected to stabilize further, with anticipated levels exceeding the current 12.16 million BTC by late 2026.

Lunde mentions that Bitcoin’s price movements often contrast with quarter-end adjustments, hinting at potential buying activity if underperformance continues relative to peers. As such, managers might ramp up Bitcoin purchases at the outset of 2026. However, the consistency of such revivals can signal potential market peaks. Yet, Lunde remains cautiously optimistic, suggesting regulatory advances and ETF structures could bolster demand once the selling tide recedes.

“There’s an assumption that the marked decrease in stagnant supply marks a turning point in market dynamics,” says Vetle Lunde.

Data from CryptoAppsy recorded Bitcoin trading at $87,115 with a slight 0.22% slip in recent hours, amidst a broader weekly decline of 5.39%, underscoring the dynamic shifts in the crypto landscape.