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Who owns bitcoin?
The public bitcoin ledger comes with a unique level of transparency that includes important information detailing where the bitcoin supply is. With the help of address tracking, public announcements, and some estimates across data sources, we can get an idea of where nearly 47% of the total bitcoin supply is today. It is estimated that a considerable part of the supply of 21 million bitcoins is lost, including the coins of Satoshi Nakamoto. There is useful data from both glass knot And On-chain analysis to suggest that nearly 4 million bitcoins were lost.
Other large amounts of bitcoin are found on exchanges, in the Grayscale Trust, or in the wallets of bitcoin miners. Whole swathes of bitcoin have been accumulated by companies like MicroStrategy and, more recently, Tether. Some 5,500 bitcoins are locked away on the Lightning Network, while other sums exist as wrapped bitcoins (WBTC) on blockchains in addition to Bitcoin.
Most bitcoin estimates can be tracked routinely when looking at examples, like known chain addresses associated with the US government from various bitcoin seizures, or when analyzing monthly updates from the production of public bitcoin miners, while other holding details can be much more difficult to pass. A private institution may have listed bitcoin holdings years ago, but is not required to publicly announce updates to its reserve. Other examples include the uncertainty surrounding government holdings. China may have 194,000 bitcoin of the entry, but it is difficult to check if this number is up to date.
That said, the table below is an overview of available data that can be expanded and improved for better accuracy in different groups. These numbers come from on-chain forensics, public SEC filings, and balance sheet certificates.
Of the 2.3 million bitcoins on the exchange, the majority resides on Binance and Coinbase. This would not include bitcoin in investment custody products like Grayscale and Coinbase Custody, for example. Binance’s bitcoin share on exchanges has grown from less than 10% in 2019 to 30% today. The company is estimated to have nearly 700,000 bitcoins on its platform, which can mainly be attributed to its dominance in the derivatives market and its international presence, while Coinbase is primarily a cash exchange with a strong presence in the United States.
Over time, the amount of bitcoin circulating supply on exchanges has grown to 17.5% of circulating supply, peaking in March 2020 before dropping to just 11.89%. We suspect bitcoin’s downward trend on exchanges as a percentage of circulating supply will continue as bitcoin spreads to a growing number of global users, thanks to increasingly sophisticated personal custody solutions. more common and robust over time.
In absolute terms, there has never been this level of long-term bitcoin holders. In relative terms, the only two times in history with a larger share of long-term coins are in 2009 before bitcoin had an exchange rate, and deep in the bear market of 2015. With such a portion of the bid out of the market, pressure from the sell side in the meantime can lead to large downward price adjustments, as many market participants play a more passive role.
We can also examine the illiquid supply of Bitcoin to quantify the dynamics of holders. The term “illiquid supply” refers to bitcoins held by entities that seldom sell, meaning these coins are not readily available for trading. To quantify this, an entity’s bitcoin holdings are deemed illiquid if less than 25% of its received bitcoins have been spent, liquid if 25% to 75% have been spent, and highly liquid if more than 75% has been spent. .
In the post-2016 halving era, illiquid bitcoin supply as a percentage of circulating supply is at an all-time high, with holder hoarding pulling coins out of the market faster than coin issuance. minors cannot distribute them.
In April 2023, the illiquid supply of bitcoin exceeded 15,000,000 coins.
The trend is clear: Bitcoin continues to distribute among multiple hands, with greater concentration of supply shifting from entities holding large amounts of bitcoin – balances of 1,000-10,000 BTC, 10,000-100,000 BTC and above to 100,000 BTC – to entities holding balances of 10 BTC or less.
It is important to note that entities holding large amounts of bitcoins, especially those with more than 10,000 BTC, are likely managing the keys of thousands or even millions of users, exchanges being an obvious example. This is often a classic source of misinterpretation and misinformation when people make claims regarding a lack of bitcoin wealth distribution. Yes, there are groups of addresses with large amounts of bitcoin, but that’s like saying a corporation owns 14% of all US dollars in the commercial banking system. While JPMorgan Chase holds $2.4 trillion of $17.1 trillion in national bank deposits and the deposits are a liability of JPMorgan, in reality they are held for millions of individuals and businesses. unique.
The main difference – apart from the legal ownership structure versus the crypto ownership structure – is the fact that Bitcoin’s ownership structure, the UTXO set, is much more transparent and easily auditable. This allows anyone to easily view the data and make informed statements about the concentration of bitcoin supply.
Bitcoin has managed to attract a wide range of holders, from individuals to businesses, private entities and even nation states. As evidenced by the increase in retail ownership and historically high levels of long-term holders, it is clear that the supply of bitcoin is more evenly distributed among this wide range of adopters. This trend is further reinforced by a decreasing amount of bitcoin held on exchanges and growing illiquid supply.
Going forward, we expect these trends of increased distribution and decreasing concentration to continue, as the capped supply of 21,000,000 bitcoins is distributed among individuals, institutions, businesses, and nation states around the world. .
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