Bitcoin
Increase in Bitcoin Owners Are Trying to Open Locked Crypto Wallets
- Bitcoin’s resurgence has triggered a wave of wallet recovery attempts, Reuters reported.
- Companies specializing in this have noticed an increase in recovery requests this year.
- According to one estimate, around 20% of bitcoin in circulation could be trapped in locked wallets.
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Cryptocurrency holders are flocking to companies that offer services to help regain access to locked wallets in a rush to ensure they are not left behind as the sector posts huge gains in 2024.
Reuters reported that recovery requests are exploding at companies like Germany-based ReWallet and US-based Wallet Recovery Service. The first had a peak in requests in March, when Bitcoin the price reached its all-time high of over $73,000.
ReWallet saw a 334% increase in requests from users locked out of their wallets last quarter, while WRS gained 30% this year through mid-April.
For investors, losing access to a wallet can be as simple as forgetting a password or no longer being able to complete two-factor authentication. Given the decentralized nature of cryptocurrencies, tokens are stored on digital blockchains, and owners typically carry a password and security phrases to access their holdings.
According to estimates offered by ReWallet, up to 20% of the bitcoin supply is inactive and trapped in lost wallets. In March, this amount was worth around US$237 billion.
But with bitcoin surging this year, some investors are trying to regain access to profit from massive gains in the space. While the world’s largest cryptocurrency has fluctuated since hitting all-time highs in March, it is up 54% since the end of 2023.
Optimistic investors ignored the recession as a consequence of broader macroeconomic issuesBut don’t expect it to last.
Analysts at Standard Chartered and Bernstein continue to hold expectations for a run higher, and both expect the token reach US$150,000albeit within different time frames.
For portfolio recovery companies, the increase in interest is profitable. After successful recovery, both ReWallet and WRS charge a fee of 20% of the wallet contents, Reuters said.