Is Bitcoin Still For Everyone? Record Concentration Among Big Players!

Recently collected data shows that a large portion of the Bitcoin is held by relatively large wallets, which increases the concentration of Bitcoin (BTC) in the market. This development has potentially significant implications for the stability of the market and the role of private investors.

82% of Bitcoin held by large wallets

Over 82% of all Bitcoin mined is held by wallets holding at least 10 BTC. This equates to a value of around $1 million or more, depending on current market prices. The concentration of Bitcoin in larger wallets is only increasing, while the share of retail investors continues to shrink.

Wallets holding 100 BTC or more actually represent over 60% of the total Bitcoin supply. These larger wallets are often held by institutional investors and liquidity providers, with some exceptions of very large private wallets.

Smaller investors lag behind

On the other hand, there are around 3,47 million BTC in wallets with less than 10 BTC, which is worth an estimated $358 billion. This segment is mainly filled with smaller retail investors who have less and less influence on the market. The behavior of these smaller investors, such as panic selling during market corrections, can significantly increase Bitcoin’s volatility.

Historically, larger wallets often profit from panic selling, buying up Bitcoin when smaller investors sell their coins on impulse, further fueling Bitcoin’s increasing concentration.

Less accessible for private individuals

The trend towards concentration is also reinforced by the high costs and low rewards of crypto mining, which makes it increasingly unattractive for private individuals to mine. Many miners have focused entirely on institutional investors in recent years, often selling their proceeds immediately after successful mining rounds.

Additionally, it is estimated that between 3 and 4 million Bitcoin could be lost forever due to forgotten private keys or inaccessible wallets. With approximately 1,14 million coins left to be mined by the year 2140, it appears that Bitcoin will continue to become increasingly scarce, with concentration only increasing in the hands of the big players.

Frequently Asked Questions

Why is Bitcoin's concentration in large wallets a concern?
The increasing concentration can lead to more market volatility and risks for private investors, who have less influence on price formation.

What do the high mining costs mean for private individuals?
The high costs and low rewards make it less attractive for private individuals to mine, further complicating access to Bitcoin.

Why are small investors vulnerable to panic selling?
Smaller investors often have less experience and resources, making them more likely to panic sell during a price decline, making them vulnerable in a volatile market.