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Crypto Owners Seek Lost Passwords After Rallies

Understanding Bitcoin Halving and Its Impact on the Crypto Market
FILE PHOTO: Representations of cryptocurrency Bitcoin are seen in this illustration, August 10, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

Crypto holders are flocking to firms that offer services to help regain access to locked wallets in a rush to make sure they’re not left behind as the sector posts huge gains in 2024.

A flood of crypto tokens with names referencing GameStop and famed trader Roaring Kitty have been created in the last 24 hours as developers try to ride a meme-coin resurgence.

Reuters reported that recovery requests are blowing up at companies such as the Germany-based ReWallet and US’ Wallet Recovery Service. The first saw requests peak in March when bitcoin’s price hit its record high of over US$73 000.

ReWallet saw a 334 percent increase in requests from users locked out of their wallets last quarter, while WRS gained 30 percent 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 often carry both a password and security phrases to access their holdings.

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According to estimates offered by ReWallet, as much as 20 percent of the bitcoin supply is inactive and trapped in lost wallets. As of March, that amount is worth around $237 billion.

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But with bitcoin’s surge this year, some investors are trying to regain access to cash in on massive gains in the space. While the world’s largest cryptocurrency has wobbled since hitting all-time highs in March, it’s up 54 percent since the end of 2023.

Bullish investors have brushed the downturn off as a consequence of broader macroeconomic issues, but don’t expect these to last.

Analysts from both Standard Chartered and Bernstein continue to hold expectations of a run higher, and both expect the token to reach US$150 000, though on different time frames.

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For wallet retrieval firms, the spike in interest is profitable. Upon successful retrieval, both ReWallet and WRS charge a fee of 20 percent of the wallet’s contents, Reuters said.

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