Grayscale Report Reveals Unexpected Diversity in Bitcoin Ownership

According to CryptoPotato, a recent report from Grayscale Investments has revealed an unexpected diversity in Bitcoin (BTC) ownership. The research found that 74% of addresses hold less than 0.01 bitcoin, equivalent to approximately $380. This dispels the common belief that Bitcoin is predominantly owned by a few individuals. In fact, around 40% of BTC's supply is concentrated among institutions like exchanges, miners, governments, public companies, and long-term holders. As of November 6th, 2023, the accessible nature of Bitcoin is highlighted by the fact that 74% of addresses hold less than 0.01 BTC. This contrasts with traditional high-risk, high-return assets like private equity and venture capital, which are often limited to accredited investors. Bitcoin is available to a global audience with internet access. The largest holders of BTC are not individual investors but institutions such as crypto exchanges and government entities. The report also introduces 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 owned by Bitcoin's mysterious creator, Satoshi Nakamoto, or simply lost BTC. Specific segments like miners and exchanges, which account for 20% of the total Bitcoin supply, exhibit price inelasticity, suggesting they are less likely to sell their holdings in response to price fluctuations. This contributes 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 signify 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.