Dormant crypto and NFT wallets: an untapped capital market

By Raffaele Redi

The vast majority of NFT assets are sitting unused in wallets.

Crypto coins in a leather wallet                                 
When crypto prices reach low supports, smart investors start to accumulate – Photo: Shutterstock.
                                

A vast amount of cryptocurrency and the majority of NFTs lie dormant in wallets that have been not activated, in some cases, for years.

Focusing first of all on fungible tokens, and in particular on the lead crypto, there are currently 4.3 million bitcoins that have not been moved for over five years, a figure that represents 22.8% of the BTC in circulation.

Around 18.8 million bitcoins have been mined so far, according to BuyBitcoinWorldwide.com, with only around 2.1 million BTC left to be mined and a production of around 900 BTCs per day. It is estimated that the last bitcoin will be mined in 2140, alongside the last bitcoin halving, all according to the programs of its unknown creator, Satoshi.

Meanwhile if we look at non-fungible tokens, the overwhelming majority of these assets are sitting unused in wallets, the same experts say.

The pivotal role of dormant coins

When prices reach low supports, smart money investors start to accumulate, determining low levels of revived supply as older coins remain dormant and young coins change hands. Most of the 7.3 million unspent coins are retained by BTC miners or NFT retailers, but others are kept dormant by crypto users.

Moreover, according to a recent estimate, among three or four million bitcoins have simply been lost – but some of them could be recovered.

Dave Bitcoin runs a Wallet Recovery Service that helps bring users’ BTC back to life. “It’s hard to estimate how much BTC is lost forever because the owners have lost the wallet seed or password. I can help if the private key is slightly damaged and some characters need to be figured out,” he told Currency.com.

As for NFTs, reNFT recently launched a project enabling holders of NFT assets to put them to work by renting them out for a set price, duration and collateral amount – in other words, letting other users ‘hire’ their NFTs for a short period of time.

The NFT rental project

While Dave is quite famous now among bitcoin enthusiasts, having recovered thousands of wallets, the idea of NFT rental is quite new to most collectors.

“In the current NFT landscape, there are no income generation methods but rather just speculative price increase over time. We expect this issue to only get worse as NFTs are adopted into mainstream use. This is already an increasingly large problem for certain NFT holders, such as funds that invest in expensive and useful yield-earning NFTs for the long run”, explains ReNFT.

“NFTs such as virtual art, gaming assets, virtual land, domain names, IP rights, and more could be rented to users for a small rental fee to generate income,” the company added.

According to DappRadar, in Q3 2021 the overall NFT market grew by 25% compared to the previous quarter, and by a staggering 500% compared to the same quarter a year earlier.

Further reading: What are non-fungible tokens (NFTs)?

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