Digital asset management company Grayscale Investments released a research report on Thursday (30th) exploring the ownership distribution of Bitcoin (BTC) and delving into the “stickiness” of Bitcoin supply, analyzing why the company believes this indicator is particularly important at present and its potential impact on the future of Bitcoin.
Bitcoin ownership widely distributed
Grayscale’s report points out that the distribution of Bitcoin ownership is more widespread than people usually think, with the majority of Bitcoin holders being small retail investors scattered around the world. Statistical data shows that 74% of addresses hold less than 0.01 Bitcoin (valued at approximately $350 based on the November 6th price), and only 2.3% of Bitcoin holders own 1 Bitcoin or more.
Percentage of Bitcoin holders by number of Bitcoins held (source: Grayscale)
While a significant portion of Bitcoin is held by large entities, Grayscale notes that “the majority of Bitcoin’s largest holders represent ‘many people’ rather than a few,” such as cryptocurrency exchanges representing millions of users and government agencies.
Grayscale emphasizes the situation of other major holders in the report, with approximately 40% of Bitcoin supply concentrated in trading platforms, mining companies ensuring network security, government entities, listed companies and index-based exchange-traded funds (ETFs), as well as dormant addresses that have been inactive for more than ten years (long-term holders).
Identifiable Bitcoin supply data (source: Grayscale)
“Dynamics of sticky supply” will increasingly impact Bitcoin price response
Grayscale’s research points out that certain groups of Bitcoin holders seem to represent “sticky supply,” resisting selling during price fluctuations. For example, researchers highlight that the supply of Bitcoin inactive for up to ten years recently reached a historical high, while balances of miners and exchanges remained stable during Bitcoin’s volatility.
Bitcoin supply inactive for over ten years (source: Grayscale)
Grayscale suggests that this lack of flexibility may amplify the impact of external events driving new demand on price in the short term, such as the potential approval of Bitcoin spot ETF in the United States or the Bitcoin halving in 2024. Grayscale states:
The report predicts that as non-liquid supply increases and short-term supply decreases, ownership dynamics will increasingly impact Bitcoin’s price response. Grayscale’s analysis emphasizes how Bitcoin’s widespread distribution among individual and institutional investors represents its increasing acceptance and evolution into the mainstream. At the same time, limited supply may enhance positive market forces, according to the researchers’ opinion.
The report concludes:
Data source
