Bitcoin's Retail Revolution: Will Small Investors Drive The Future?

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A new research report has shed light on the ownership landscape of Bitcoin (CRYPTO: BTC), revealing that a substantial majority of Bitcoin holders are small investors, with approximately 74% of Bitcoin addresses holding less than 0.01 BTC.

The study, by Grayscale Research, titled "Demystifying Bitcoin's Ownership Landscape," shows that approximately 74% of Bitcoin addresses contain holdings of less than 0.01 BTC, roughly equating to $350 as of Nov. 6, 2023.

This widespread distribution of Bitcoin is a stark contrast to other high-risk, high-return assets typically reserved for accredited investors.

Bitcoin’s accessibility to a global retail audience has led to a decentralized and open-source pattern in its ownership structure.

Key Findings On Large Bitcoin Holders:

Interestingly, only a small fraction (2.3%) of Bitcoin owners possess more than 1 BTC.

The report also identifies the largest Bitcoin wallet addresses, which are primarily owned by crypto exchanges and government entities, rather than individual investors.

This includes prominent exchanges like Binance (CRYPTO: BNB) and Robinhood (NASDAQ:HOOD), which collectively represent millions of users worldwide.

Institutional Involvement And Identifiable Owners:

Grayscale's research highlights that around 40% of the total Bitcoin supply can be linked to identifiable ownership groups.

Also Read: Raoul Pal's Insights On Business Cycle Impact On Asset Classes, Including Blue Chip Cryptos Over Certain Altcoins

This segment includes exchanges, government entities, public and private companies like Tesla (NASDAQ:TSLA) and Block Inc. (NYSE:BLK), mining companies securing the Bitcoin network, ETFs, wrapped BTC, and dormant addresses.

Significance Of 'Sticky Supply':

The concept of "sticky supply" is particularly notable in the report.

It refers to Bitcoin owners who are likely to hold onto their investments long-term.

For example, 14% of Bitcoin's supply has not been moved in over a decade, which could include original coins owned by Bitcoin's presumed creator, Satoshi Nakamoto, lost coins, or those held by long-term investors.

Market Implications Of Ownership Structure:

The report underscores the potential market impact of this ownership structure.

The high percentage of long-term holders and relatively inelastic supply might enhance the effect of demand-related changes on Bitcoin’s price.

This is compared to "low float" stocks in traditional markets, where limited actively traded supply can lead to significant price movements.

Read Next: Binance's Regulatory Woes Escalate As This Country's Regulators Restrict Access

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