Galaxy Digital’s $9 Billion Bitcoin Sale Linked to Early MyBitcoin Wallets Suggests Market Resilience

• Galaxy Digital has executed a monumental $9 billion Bitcoin sale on behalf of a long-term holder, marking one of the largest transactions in Bitcoin’s history.

• On-chain analysts have linked the coins to wallets associated with MyBitcoin, a defunct crypto platform that ceased operations after a 2011 hack.

• Despite concerns about the sale’s scale and urgency, Bitcoin’s rapid recovery above $117,000 underscores its increasing market resilience.

Galaxy Digital’s $9 billion Bitcoin sale traced to early MyBitcoin wallets, highlighting Bitcoin’s market strength amid large-scale transactions.

Galaxy Digital’s $9 Billion Bitcoin Sale Linked to Dormant MyBitcoin Wallets

Galaxy Digital recently disclosed the sale of over 80,000 Bitcoin, valued at more than $9 billion, on behalf of a long-term investor. This transaction, executed on July 25, stands as one of the largest single Bitcoin sales ever recorded. The coins originated from an unnamed client who acquired them during Bitcoin’s infancy and held them for over a decade. Galaxy Digital characterized the sale as part of the client’s estate planning strategy, aiming to realize gains accumulated over many years.

In a unique move, Galaxy embedded the announcement on-chain by utilizing the op_return field within the transaction metadata, signaling transparency and innovation in communication. This method allowed the firm to permanently record the sale details on the Bitcoin blockchain.

Galaxy Digital’s Embedded Message on Bitcoin Network. Source: Mempool

The transaction notably included sending 1 satoshi—the smallest Bitcoin unit—to each recipient address, a symbolic gesture that drew significant attention from blockchain analysts. Pseudonymous Bitcoin analyst Mononaunt remarked on the on-chain announcement, emphasizing the novelty of embedding a press release directly into the blockchain.

Tracing the Origins: MyBitcoin Wallets and Historical Context

Blockchain investigators traced the Bitcoin involved in the sale to addresses linked to MyBitcoin, one of the earliest Bitcoin wallet services. MyBitcoin infamously shut down in 2011 following a major hack, leaving many coins unaccounted for. CryptoQuant CEO Ki Young Ju highlighted that these wallets had remained dormant since April 2011, just prior to the platform’s collapse, sparking speculation about the seller’s identity.

Ju suggested the coins might belong to either the hacker responsible for the breach or the anonymous founder known as Tom Williams. He further noted that Galaxy Digital likely acquired the Bitcoin from these sources but questioned whether forensic analysis was conducted to verify the provenance.

Market Implications and Analyst Perspectives on the Sale

The sheer magnitude of the sale prompted market analysts to question the rationale behind liquidating such a substantial amount in a single transaction. Bloomberg’s Eric Balchunas pointed out that executing a $9 billion sale would typically induce significant market slippage, raising concerns about the seller’s motivations and timing.

Balchunas speculated, “Have they lost faith that badly that they want to take that much money out that quickly? Unless they plan to buy the LA Lakers in cash, it seems odd and even concerning.”

Conversely, Eliezer Ndinga of 21Shares argued that Galaxy Digital’s involvement likely entailed rigorous Know Your Customer (KYC) protocols, mitigating the risk of the seller being an unidentified malicious actor. Ndinga noted, “It’s a behavior akin to a hacker but if that amount was processed by Galaxy I assumed they had a stringent KYC process to enable transaction to go through.”

Bitcoin’s Market Resilience Amidst Large-Scale Sell-Off

Despite initial concerns, Bitcoin demonstrated remarkable resilience following the sale. The asset swiftly rebounded from a multi-week low below $115,000 to trade above $117,000 at press time. This recovery highlights Bitcoin’s growing maturity and acceptance as a robust independent asset class capable of absorbing significant market shocks.

Market observers praised this turnaround as evidence of increased liquidity and investor confidence in Bitcoin’s long-term value proposition, reinforcing its position within diversified portfolios.

Conclusion

The $9 billion Bitcoin sale facilitated by Galaxy Digital underscores the evolving dynamics of large-scale crypto transactions and the importance of transparency through on-chain disclosures. Tracing the coins back to early MyBitcoin wallets adds a historical dimension to the event, while Bitcoin’s swift price recovery signals its strengthening market resilience. As institutional involvement deepens, such transactions will likely become more common, emphasizing the need for robust compliance and analytical frameworks to maintain market integrity.