A recent report from Grayscale Investments has revealed surprising diversity in Bitcoin (BTC) ownership. It turns out that 74% of addresses hold less than 0.01 BTC, which is approximately equivalent to $380 USD at the time of writing.
Grayscale’s research dispels the common misconception that Bitcoin is primarily owned by a few individuals, disclosing that around 40% of BTC supply is concentrated among entities such as cryptocurrency exchanges, miners, governments, publicly traded companies, and long-term hodlers.
As of November 6, 2023, 74% of Bitcoin addresses hold less than 0.01 BTC, making it accessible to a global audience with internet access. This sets Bitcoin apart from traditional high-risk, high-return assets like private equity and venture capital, which are typically limited to accredited investors. Bitcoin’s accessibility is a noteworthy aspect.
Analyzing the top Bitcoin wallet addresses reveals that the largest holders are not individual investors but rather organizations like cryptocurrency exchanges and government entities.
The report also introduces the concept of “fixed supply,” referring to Bitcoin held for long-term purposes and less likely to be sold in the short term. This category comprises 14% of the Bitcoin supply, which has not been touched in over a decade and may include the holdings of Bitcoin’s mysterious creator, Satoshi Nakamoto, or simply lost BTC.
Regarding supply dynamics, specific segments like miners and exchanges account for 20% of the total Bitcoin supply, showing a limited price elasticity. This suggests that these groups are less likely to sell their held shares in response to price fluctuations, contributing to the relatively low liquidity of the Bitcoin supply.
The stable supply aspect is relevant in the context of upcoming events, such as the potential approval of a Bitcoin ETF spot in the United States. Approving a Bitcoin ETF spot could further tighten the already restricted Bitcoin supply, amplifying price dynamics related to asset demand.
The research concludes that the diverse and distributed nature of BTC ownership and the increasing presence of institutional investors indicate a significant shift in the cryptocurrency landscape. As we approach key milestones like the Bitcoin halving event in 2024 and potential regulatory changes, ownership dynamics and BTC supply motivations may play a pivotal role in shaping its market behavior.