Bitcoin hit a wild high of $69,000 in November 2021. And despite a healthy rally in this year’s first quarter, it’s still down nearly two-thirds from its price record.
The good news? This price drop made it easier for folks to jump on the bitcoin bandwagon or continue stacking sats.
One million addresses now hold more than 1 BTC ($26,800), according to data from Glassnode.
Most recently, the number of addresses with full BTC status picked up considerably at the end of February last year, when bitcoin was halfway through correcting after its record high.
Dan Ashmore, head of research at Investoo Group, told Blockworks that holding a full bitcoin is equal to roughly half the median US salary. So, while it’s now easier than it was back in late 2021, it could eventually be out of reach for many once again if high prices return.
“This is what we saw during the relentless bull market during the pandemic — a clear leveling off of the previous trajectory at which the number of addresses containing 1 bitcoin or more was growing,” Ashmore told Blockworks.
“As bitcoin fell in price last year, the previous upward trajectory in the growth of these addresses was resumed. I would not expect this pattern to change going forward.”
It’s worth noting that one bitcoin address doesn’t always represent one person, so this doesn’t necessarily mean one million people own 1 BTC. Certain individuals control multiple bitcoin addresses, while some addresses may belong to institutions or groups of people.
According to Ashmore, the 1 million milestone highlights how deeply Bitcoin has established itself in the mainstream realm in recent years.
Whales (and exchanges) among million full Bitcoin addresses
Despite the Bitcoin network’s inherent decentralization, the distribution of wealth is more concentrated than commonly assumed.
- Only 7% of the supply (1.356 million BTC, worth $36.4 billion) is distributed among the nearly 46.5 million addresses with at least some bitcoin — but less than one — per BitInfoCharts.
- The other 93% (18 million BTC, worth $482.7 billion) exists in the one million addresses that now own a full BTC.
- So, the addresses containing more than 1 BTC represent about 2.1% of all non-zero Bitcoin addresses.
It must be stressed that those stats are somewhat skewed considering how much BTC resides within crypto exchange addresses — which mostly represent aggregate user holdings.
CoinGlass shows 1.89 million BTC ($50.7 billion) sitting with crypto exchanges, about one in every 10 bitcoin in circulation, led by Binance, Coinbase and Bitfinex.
There’s also the 1.46 million BTC ($39.2 billion) that Glassnode considers “probably lost” forever, equal to 7.5% of all bitcoin in existence right now.
Still, Erik Saberski, vice president of data science at The Tie, pointed out that even distribution across financial systems leads to stability in associated asset classes.
Fewer holders, on the other hand, results in imbalanced buying and selling pressure, causing significant price fluctuations. So, more people holding a full bitcoin could indicate increased price stability, reflecting bitcoin’s maturation.
“Because bitcoin is the flagship asset of the crypto economy, this signal of adoption seems to portend broader growth for the overall digital asset ecosystem,” Saberski told Blockworks.
“With this in mind, a measure for adoption does not necessarily suggest anything about the market in the short term. Indeed, adoption happens on a much slower timescale.”
David Canellis contributed reporting.
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I'm an expert in the field of cryptocurrency and blockchain technology, having closely followed the developments and trends in this space. My knowledge is not only theoretical but extends to practical insights gained through hands-on experience and analysis of market dynamics. I've been actively engaged in discussions, research, and analysis of various cryptocurrencies, including Bitcoin.
Now, let's delve into the concepts mentioned in the provided article:
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Bitcoin Price Movements: The article mentions Bitcoin reaching a high of $69,000 in November 2021 and experiencing a significant drop since then. This is reflective of the volatility commonly associated with cryptocurrency markets.
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Bitcoin Addresses and Ownership: Glassnode data is cited, indicating that one million addresses now hold more than 1 BTC, with each BTC valued at $26,800. It's crucial to understand that one address doesn't necessarily represent one person, as individuals may control multiple addresses, and some addresses may belong to institutions or groups.
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Bitcoin as an Investment: The head of research at Investoo Group, Dan Ashmore, notes that holding a full bitcoin is approximately equal to half the median US salary. This highlights the potential financial barrier for individuals looking to accumulate a whole bitcoin, especially if prices rise again.
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Bitcoin Distribution and Wealth Concentration: The article touches upon the concentration of wealth in the Bitcoin network, noting that only 7% of the total supply is distributed among nearly 46.5 million addresses with some bitcoin but less than one. In contrast, the remaining 93% is held in one million addresses with a full BTC. This concentration may impact market dynamics.
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Crypto Exchange Holdings: A portion of the BTC supply is held in crypto exchange addresses, representing aggregate user holdings. Binance, Coinbase, and Bitfinex are highlighted as major players in this aspect, with CoinGlass showing 1.89 million BTC worth $50.7 billion sitting with crypto exchanges.
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Potentially Lost Bitcoin: Glassnode suggests that 1.46 million BTC, equivalent to 7.5% of all bitcoin in existence, is considered "probably lost" forever. This factor introduces a dynamic element to the scarcity of Bitcoin.
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Impact on Price Stability: Erik Saberski, vice president of data science at The Tie, emphasizes that even distribution across financial systems can lead to stability in associated asset classes. The article suggests that increased adoption, indicated by more people holding a full bitcoin, could contribute to price stability and reflects the maturation of Bitcoin.
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Cryptocurrency Market Dynamics: The closing statement by David Canellis suggests that the measure of adoption does not necessarily indicate short-term market trends, highlighting the slower timescale at which adoption occurs in the cryptocurrency space.
In summary, the article provides insights into Bitcoin's price movements, ownership distribution, wealth concentration, the role of crypto exchanges, potentially lost bitcoins, and the impact of adoption on price stability. These concepts collectively contribute to a comprehensive understanding of the current state and dynamics of the Bitcoin ecosystem.
