Cryptocurrency analysis platform Arkham Intelligence stated that the move that took place yesterday and enabled the transfer of 80,000 Bitcoins worth approximately $8 billion may have been due to an address format update, not a sale.
According to Arkham’s analysis, the Bitcoin whale in question is moving its assets from the traditional “1-” address format to the more modern and secure Bech32 address format, which starts with “bc1q-.” This is thought to provide increased security, lower transaction fees, and long-term storage for Bitcoin users.
Analysts explained the situation as follows:
“Yesterday’s $8 billion transfers were most likely related to address format upgrades. There is a shift from 1- addresses to bc1q- addresses. There is no indication that the whale is selling.”
Address formats have changed over time on the Bitcoin network:
- Addresses starting with “1-” (P2PKH): Bitcoin’s first address format. Although shorter and more widely used, it does not support SegWit (Segregated Witness), which leads to higher transaction fees.
- Addresses starting with “3-” (P2SH): Provides multi-signature (multisig) and SegWit compatibility, but still does not offer full throughput.
- Addresses starting with “bc1q-” (Bech32 format): The latest format that supports full SegWit features. It offers advantages such as lower transaction fees, faster transaction processing, and greater resistance to typos.
*This is not investment advice.