Control of Bitcoin’s Supply Shifting Towards Smaller Investors of BTC

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In summary:

  • Bitcoin’s supply and ownership has experienced a shift from so-called whales to smaller entities.
  • Those holding 10 BTC or less has increased from 5.1% to 13.8% in 5 years.
  • Entities holding between 100 and 100k BTC has declined from 62.9% to 49.8% in the same time period. 

In the past five years, there has been a shift in entities controlling the supply of Bitcoin (BTC). According to the team at Glassnode, those holding 10 Bitcoin (BTC) or less has increased from 5.1% to 13.8% in the stated time period. Furthermore, entities with 100 – 100,000 BTC has declined from 62.9% to 49.8%.

The team at Glassnode shared their analysis of the shift via the following tweet.

Control of #Bitcoin’s supply has been steadily shifting towards smaller entities.

The % of supply owned by entities holding ≤ 10 $BTC grew from 5.1% to 13.8% in 5 years, while the percent held by entities with 100-100k BTC declined from 62.9% to 49.8%.

— glassnode (@glassnode) August 6, 2020

What Does the Shift in Bitcoin Ownership Mean?

One way of interpreting the information is that Bitcoin whales have been gradually cashing in on the market success of BTC. The buyers of the said BTC are individual retail traders who have seen the value of Bitcoin and plan on playing the long game with the digital asset.

With the Fed and other global central banks continually printing fiat currency, Bitcoin, Gold and Silver have benefited positively from this as investors are using them as a store of value to hedge against inflation.

Brief Price Analysis of Bitcoin

With more and more investors viewing Bitcoin as digital gold and a hedge against inflation, the price of BTC continues on its slow and steady climb to reclaim $12,000. With the weekend only a few hours away, Bitcoin might do what it did last weekend by continuing with its bullish momentum.

On the 31st of July to the 1st of August, Bitcoin pushed hard from $11k levels to $12,100. This was before the fast and furious dip back to $10,500 and the subsequent bounce to $11k.

However, Bitcoin’s upward trajectory might be better off going through some sideways before another push up as explained by Mati Greenspan in his most recent market analysis.

It would be nice if the bitcoin price would cool down a bit into a more sustainable rally, for example experiencing a bit of a retracement before blasting through $12,000 sometime next week.

But judging by the current temperature, I’m not even sure a cooldown period is possible.

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