Will Ogden Moore
Last Updated: 11/30/2023 | 11 min. read
Bitcoin ownership is widely distributed across a variety of groups. 74% of Bitcoin owners hold less than around 0.01 worth of Bitcoin (~$350 as of November 6th, 2023).
Around 40% of Bitcoin ownership falls into identifiable categories, including exchanges, miners, governments, balance sheets of public companies, and dormant supply.
Significantly, some of these groups represent “sticky supply,” which could increase the impact of demand related tailwinds, including the 2024 Bitcoin halving or a potential spot Bitcoin ETF approval.
As we approach the end of 2023, two events loom large: the 2024 Bitcoin (“BTC”) halving and a potential spot Bitcoin ETF in the US. Both events could potentially expand the scope and breadth of investors seeking access to Bitcoin. One common misconception is that a small number of individuals predominantly own large holdings of Bitcoin. However, this is factually inaccurate. Because the Bitcoin blockchain is transparent, any individual can monitor information on Bitcoin in real-time, including its ownership structure. Data from a wide variety of sources — including Glassnode, Arkham Intelligence, Bitinfocharts, and Bitcoin Treasuries — shows that Bitcoin supply is widely distributed among a variety of individuals, groups, and organizations around the globe.
Bitcoin Ownership is Widely Distributed
Figure 1: Distribution of Bitcoin addresses
Note: For ease of visibility, Dollar numbers are rounded to reflect one Bitcoin as worth $35,000
In addition to Bitcoin ownership primarily spread across multiple small holders, most of Bitcoin’s largest holders represent “the many” rather than a few. As of November 6th 2023, each of the top five wallet addresses by Bitcoin holdings are either crypto exchanges or government entities, as outlined in the chart below.
Figure 2: Top 5 Overall Bitcoin Wallet Addresses by Balance
Note: Often exchanges hold multiple wallets/addresses which is why Binance appears here multiple times. Source: Bitinfocharts, Grayscale Investments. Data and holdings in USD as of 11/14/2023. Bitcoin price in this chart is equal to $36,891.
Note: Grayscale’s holdings are reflected in the “ETFs and Funds” Category. This category includes futures based products and other funds that hold Bitcoin. Sources: Bitcoin Treasuries, Arkham Intelligence, Glassnode, Bitinfocharts. Note: There may be some overlap between some groups (e.g. supply last active 10 years ago and Miners). All data as of 11/13/2023. For illustrative purposes only and is subject to change.
It is important for investors to understand and analyze the largest owners of Bitcoin, and the potential implications of these holders on Bitcoin’s supply dynamics.
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[7]. We believe this portion of supply can be attributed to original coins owned by Satoshi Nakamoto, lost coins or addresses, and decade-long holders. As seen below, decade-long inactive supply has been growing since 2019 and is currently at an all-time high.
For illustrative purposes only.
So, what is the significance of these ownership groups indicating price inelasticity?
Bitcoin ownership is distributed and diverse. Further, Bitcoin ownership among respected institutions indicates a maturation of the Bitcoin markets and increased public acceptance and mainstream adoption.
Looking ahead, global political and regulatory developments could greatly impact continued adoption and demand for this asset. For example: a potential spot Bitcoin ETF in the US could further remove friction for individuals and institutions looking to allocate to Bitcoin, and the recent presidential election in Argentina could signify a shift in how developing economies consider Bitcoin and other crypto assets. As of November 2023, there are approximately less than six months until the 2024 Bitcoin halving.
Our team will be watching these developments closely, and will share more information as we’re able. You can sign up here to join Grayscale’s mailing list to stay apprised of relevant updates.
[1] Sticky supply is defined as supply that is relatively price inelastic or unlikely to sell in the short term.
[2] Worth approximately $350 as of November 6th, 2023
[5] Some members of these groups may have overlap with others (e.g. inactive supply and miners or public companies and miners)
[6] Wrapped BTC refers to Bitcoin that is locked in a smart contract and held as a derivative on another blockchain (e.g. Ethereum)
[8] An individual or a group of consumers whose demand for a particular good or service shows relatively little responsiveness or sensitivity to changes in its price.
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