The ownership of Bitcoin has long been a subject of debate and speculation. Many believe that the majority of Bitcoin is held by a select few individuals, but a recent report from Grayscale Investments paints a different picture. According to the report, 74% of Bitcoin addresses hold less than 0.01 BTC, equivalent to approximately $380. This statistic reveals the unexpected diversity in Bitcoin ownership, highlighting its accessibility to a global audience with internet access.
Contrary to popular belief, it is not individual investors who hold the largest portions of Bitcoin. The report reveals that around 40% of Bitcoin’s total supply is concentrated among institutions such as crypto exchanges, mining firms, and government entities. This includes well-known public companies like Tesla and MicroStrategy, as well as dormant addresses that may belong to Bitcoin’s mysterious creator, Satoshi Nakamoto, or simply lost BTC. This institutional presence in Bitcoin ownership signifies a significant shift in the cryptocurrency landscape.
The Concept of Sticky Supply
One interesting concept highlighted in the report is the idea of “sticky supply.” This refers to Bitcoin that is held for long-term purposes and is less likely to be sold in the short term. Approximately 14% of Bitcoin’s supply falls into this category, untouched for over a decade. This further adds to the complexity of Bitcoin ownership, as these long-term holders are less influenced by short-term price fluctuations.
Examining specific segments of Bitcoin ownership, such as miners and exchanges, reveals their price inelasticity. These groups, which account for 20% of the total Bitcoin supply, are less likely to sell their holdings in response to price fluctuations. This characteristic contributes to the limited liquid supply of Bitcoin, creating a scenario where supply struggles to meet the growing demand.
The report’s findings have significant implications for the future of Bitcoin ownership and its market behavior. As the cryptocurrency approaches milestones like the 2024 Bitcoin halving and potential regulatory changes, the dynamics of ownership and supply will play a pivotal role. The growing presence of institutional investors further solidifies Bitcoin’s position as a legitimate asset class. Additionally, the potential approval of a spot Bitcoin ETF in the US could further tighten the already constrained supply of Bitcoin, leading to increased demand and price dynamics.
The Grayscale Investments report challenges the prevailing notion of Bitcoin’s ownership. It reveals a diverse landscape where the majority of addresses hold small amounts of Bitcoin, highlighting its accessibility to a wide audience. Furthermore, institutions like crypto exchanges and government entities hold a significant portion of Bitcoin’s total supply. As Bitcoin continues to evolve, understanding its ownership dynamics will be crucial in predicting its future market behavior.
