The million dollar question is what prompted a Bitcoin OG to send 20 BTC to a custodian, retrieve it back, and then deliberately burn it?
In March, someone moved $1 million worth of Bitcoin through a large crypto custodian. Three weeks later, almost exactly the same amount came back. Incredibly, less than two months after that, the Bitcoin was deliberately destroyed.
The wallet had been dormant for almost 12 years before it suddenly sprang back to life. Bitcoin educator Bennet noted it sent 20.00010537 BTC to “a custodian of some kind” before receiving it back again (minus $3 or so).
The mystery BTC transaction is part of a wider enigma surrounding 107 BTC burned in May, worth roughly $8.5 million at the time.
New blockchain analysis shows that five wallets that ultimately destroyed their Bitcoin appear to have been controlled by the same person. It was likely an early Bitcoin holder who had funds on the collapsed Mt. Gox exchange.
But why on earth would anyone deliberately destroy millions of dollars worth of Bitcoin?
The five addresses that eventually sent their Bitcoin to an unspendable address show “strong indicators of common ownership” according to Chainalysis.
How to destroy Bitcoin. Source: Bennet.org
All five wallets were initially funded on the same day in April 2014, and each subsequently sent almost the same dollar-equivalent amount of BTC to the same deposit address at a large centralized exchange.
Related: Bitcoin faces true demand test above $83K as liquidity thickens: Glassnode
The addresses also seem to have operated on a rotational basis: one would send Bitcoin to the exchange until its activity stopped, then another would take over with transactions of a “similar cadence and value.”
Most of the funds, Chainalysis says, can be traced back to Mt. Gox, “suggesting the owner was an early adopter of Bitcoin.”
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