Bitcoin Price Treads Water in the Wake of Craig Wright Saga
Bitcoin’s price was little changed on Wednesday, as volumes fell sharply following news that Craig Wright must forfeit half of his BTC mined before 2014. The decision, which was tied to a protracted legal case against the self-declared Satoshi Nakamoto, has raised concerns that a major bitcoin dump could soon be coming.
The bitcoin price traded within a $200 band on Bitstamp, touching an intraday low of $10,027.83. It was last seen hovering north of $10,100, having declined 0.6%.
The largest cryptocurrency by market cap appears to have found stability near the $10,000 range – a level that deVere CEO Nigel Green described as the “new normal bottom.”
Trading in BTC has declined sharply this week, with daily turnover reaching $587 million, according to Bitwise. That figure is based on the 24-hour volume of ten verified spot exchanges.
Volatility has also declined, which means bitcoin’s daily fluctuations have narrowed. Bitcoin’s 30-day volatility estimate is 3.47%, according to bitvol.info. Earlier this month, it reached a low of 3.26%.
Bitcoin Dump Coming?
On Tuesday, Magistrate Judge Bruce Reinhart confirmed that Craig Wright must forfeit half of his bitcoin holdings held prior to 2014. The decision was linked to a legal case against Wright filed by the estate of computer scientist David Kleinman, a former associate who died in 2013.
The official court document deems the following to be facts:
“(1) Dr. Wright and David Kleinman entered into a 50/50 partnership to develop Bitcoin intellectual property and to mine bitcoin; (2) any Bitcoin-related intellectual property developed by Dr. Wright prior to David Kleiman’s death was property of the partnership, (3) all bitcoin mined by Dr. Wright prior to David Kleiman’s death (“the partnership’s bitcoin”) was property of the partnership when mined; and (4) Plaintiffs presently retain an ownership interest in the partnership’s bitcoin, and any assets traceable to them.”
The actual amount that Wright has to pay is 500,000 BTC, which is equivalent to more than $5 billion at today’s prices. There are concerns that 200,000 coins could soon flood the market as the Kleinman estate settles its tax obligations following the lawsuit.
“The judge ordered me to send just under 500,000 BTC over to Ira,” Wright told Modern Consensus. “Let’s see what it does to the market. I wouldn’t have tanked the market. I’m nice.”
Bitcoin whales – i.e., oversized holders of the virtual currency – have been known to rock the boat from time to time with strategic sales. However, their role in the market isn’t fully understood. Research by Chainanalysis last year revealed that the whales may actually have a stabilizing role in the market.
Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock. Chart via TradingView.