Unravel the intricacies of Bitcoin ownership and the role of 'whales' in the cryptocurrency market. Delve into the debate surrounding concentration and accumulation, challenging preconceived notions and shedding light on the dynamic nature of digital asset ownership.
Bitcoin addresses are the basic public addresses recorded on the blockchain that send and receive BTC.
Through the application of a variety of heuristics and advanced clustering algorithms, one can identify with very high confidence which cluster of addresses are controlled by the same participant, i.e. network entity.
- This creates an upper bound for the actual number of network participants.
Discussion
The above figures are an estimate for an upper bound of the true distribution of Bitcoin ownership. We expect the actual distribution to be more evenly distributed across entity sizes.
- Several points to take into consideration: Custodians, Wrapped BTC, Lost coins, The estimated number of small network entities, Supply on exchanges, and Exchange users.
The Rise of Whales: Institutional Investors are Entering
Since the beginning of 2020, the supply held by large entities (whales + humpbacks) has increased 13.4%, and their number by more than 27% to over 2,160 whale entities
- This supports the current narrative that high net worth individuals and institutional investors have been entering the space
Bitcoin Supply Distribution
Shrimps (<1 BTC)Crab (1-10 BTC)Octopus (10-50 BTC)Fish (50-100 BTC)Dolphin (100-500 BTC)Shark (500-1,000 BTC)Whale (1000-50000 BTC)Humpback (>5,000BTC)
- Remove known exchange and miner entities from these categories and treat them separately
The Number of Entities
The number of entities associated with the above defined categories is heavily skewed towards small holders.
- 2% of network entities control 71.5% of all Bitcoin supply, while 95% control 95% of the supply (log-lin scale).
