Bitcoin ownership is widely distributed across a variety of groups, according to an update from Grayscale.
The report reveals that 74% of Bitcoin (BTC) owners currently hold less than about 0.01 worth of Bitcoin (~$350 as of November 6th, 2023). The research report also mentions that roughly 40% of Bitcoin ownership falls into identifiable categories, such as exchanges, miners, governments, balance sheets of public firms, as well as dormant supply.
Importantly, some of these groups represent “sticky supply,” which may potentially increase the impact of demand-related tailwinds, including the 2024 Bitcoin halving or a potential spot Bitcoin ETF approval, the Grayscale team added.
They pointed out that as we approach the end of 2023, two events will be quite noteworthy: the 2024 Bitcoin (BTC) halving and a potential spot Bitcoin ETF in the United States.
According to Grayscale, both events have the potential to considerably expand the scope and breadth of investors seeking access to Bitcoin, the flagship cryptocurrency.
As clarified in the Grayscale report, a common misconception is that a relatively small number of people or entities predominantly own large holdings of Bitcoin, which remains the leading digital asset in terms of market cap and overall adoption.
The report states that this is “factually inaccurate.”
That’s because the Bitcoin blockchain is transparent, which basically means that anyone is able to monitor information on Bitcoin reliably in real-time, including its ownership structure.
Data from various sources like Glassnode, Arkham Intelligence, Bitinfocharts, and Bitcoin Treasuries indicates that Bitcoin supply is “widely distributed among a variety of individuals, groups, and organizations around the globe,” the report claims.
As stated in the update from Grayscale, a considerable majority of Bitcoin holders are fairly small investors, as about 74% of BTC addresses hold less than 0.01 BTC, worth about $350 as of November 6th, 2023.
When compared to other high-risk, high-return assets, like private equity and venture capital, that are strictly available to accredited investors, Bitcoin is currently accessible to a global retail market (with access to the internet).
That’s why Bitcoin’s ownership structure “reflects the decentralized, open-source nature of Bitcoin’s technology,” the report explains. And in reality, merely 2.3% of all Bitcoin owners own 1 BTC or more (worth about $35,000 per Bitcoin as of November 6th, 2023).
In addition to BTC ownership mainly being spread across multiple small holders, most of Bitcoin’s largest holders represent “the many” instead of the few. As of November 6th 2023, each of the top five wallet addresses by Bitcoin holdings are either cryptocurrency exchanges or governmental entities.
Importantly, exchange addresses such as Binance and Robinhood represent millions of consumers. For instance, Robinhood has 11 million monthly users “owning and trading Bitcoin on their platform.”
Meanwhile, Binance has nearly 90 million monthly active users. Additionally, the US Government address “represents institutional rather than individual ownership,” the report claims.
The report added:
“Bitcoin is held by institutions ranging from exchanges to public companies to major governments. While some members of these groups may overlap with others, around 40% of the total supply of Bitcoin can be attributed to identifiable ownership groups, such as exchanges, government entities, public and private companies (e.g., Tesla and Block Inc.), mining companies that secure the Bitcoin network, ETFs and other publicly-traded funds, wrapped BTC, consumer trading platforms (e.g., Robinhood), and dormant addresses.”
As explained in the Grayscale report, some of these specific ownership categories “reflect potentially sticky supply dynamics – in other words, owners who take a long-term position on a particular asset.”
For example, 14% of Bitcoin supply has “not moved in 10 years.”
Grayscale believes this portion of supply “can be attributed to original coins owned by Satoshi Nakamoto, lost coins or addresses, and decade-long holders.” As revealed in the report, decade-long inactive supply “has been growing since 2019 and is currently at an all-time high.”
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