Bitcoin Ownership More Diverse Than Expected, Reveals Grayscale Report

A recent report from Grayscale Investments revealed an unexpected diversity in Bitcoin (BTC) ownership, with 74% of addresses holding less than 0.01 bitcoin, equivalent to approximately $380.

Grayscale’s research dispels the inaccurate public belief that Bitcoin is predominantly owned by a few individuals, revealing around 40% of BTC’s supply is concentrated among institutions like exchanges, miners, governments, public companies, and long-term holders.

Bitcoin’s Widespread Ownership

As of November 6th, 2023, 74% of Bitcoin addresses hold less than 0.01 BTC, equivalent to approximately $380 at the time of writing.

The statistic highlights the accessible nature of Bitcoin, contrasting with traditional high-risk, high-return assets like private equity and venture capital, often limited to accredited investors. Bitcoin, unlike these traditional assets, is available to a global audience with internet access.

An analysis of the top BTC wallet addresses reveals that the largest holders are not individual investors but institutions such as crypto exchanges and government entities.

The report reveals that about 40% of Bitcoin’s total supply is held by identifiable groups and public companies like Tesla and MicroStrategy, mining firms, ETFs, and dormant addresses.

The Concept of “Sticky Supply”

Another takeaway from the report is the concept of “sticky supply,” referring to bitcoin held for long-term purposes and less likely to be sold in the short term. This includes 14% of the supply, which hasn’t been touched in over a decade, possibly such owned by Bitcoin’s mysterious creator, Satoshi Nakamoto, or simply lost BTC.

Regarding supply dynamics, specific segments like miners and exchanges, which account for 20% of the total Bitcoin supply, exhibit price inelasticity. The characteristic suggests these groups are less likely to sell their holdings in response to price fluctuations, further contributing to the limited liquid supply of Bitcoin.

The aspect of sticky supply is relevant in the context of upcoming events, such as the potential approval of a spot Bitcoin ETF in the US. Spot ETF approvals could further tighten Bitcoin’s already constrained supply, amplifying the asset’s demand-related price dynamics.

The research concludes that the diverse and distributed nature of BTC ownership and the growing presence of institutional investors signifies a significant shift in the cryptocurrency landscape.

As we approach significant milestones like the 2024 Bitcoin halving and potential regulatory changes, BTC’s ownership and supply dynamics could play a pivotal role in shaping its market behavior.