Bitcoin's Retail Revolution: Will Small Investors Drive The Future?

A new research report shed light on the ownership landscape of Bitcoin BTC/USD, revealing a substantial majority of Bitcoin holders were small investors, with approximately 74% of Bitcoin addresses holding less than 0.01 BTC.

The study, by Grayscale Research, titled "Demystifying Bitcoin's Ownership Landscape," showed approximately 74% of Bitcoin addresses contained holdings of less than 0.01 BTC, roughly equating to $350 as of Nov. 6, 2023.

This widespread distribution of Bitcoin is a stark contrast to other high-risk, high-return assets typically reserved for accredited investors.

Bitcoin’s accessibility to a global retail audience has led to a decentralized and open-source pattern in its ownership structure.

Key Findings On Large Bitcoin Holders: Interestingly, only a small fraction (2.3%) of Bitcoin owners possess more than 1 Bitcoin.

The report also identifies the largest Bitcoin wallet addresses, which are primarily owned by crypto exchanges and government entities, rather than individual investors.

This includes prominent exchanges such as Binance BNB/USD and Robinhood Markets Inc HOOD, which collectively represent millions of users worldwide.

Institutional Involvement And Identifiable Owners: Grayscale's research highlighted that around 40% of the total Bitcoin supply could be linked to identifiable ownership groups.

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This segment included exchanges, government entities, public and private companies such as Tesla Inc TSLA and Block Inc. BLK, mining companies securing the Bitcoin network, ETFs, wrapped BTC and dormant addresses.

Significance Of "Sticky Supply": The concept of "sticky supply" is particularly notable in the report.

It referred to Bitcoin owners who were likely to hold onto their investments long-term.

For example, 14% of Bitcoin's supply had not been moved in over a decade, which could include original coins owned by Bitcoin's presumed creator, Satoshi Nakamoto, lost coins or those held by long-term investors.

Market Implications Of Ownership Structure: The report underscored the potential market impact of this ownership structure.

The high percentage of long-term holders and relatively inelastic supply might enhance the effect of demand-related changes on Bitcoin’s price.

This is compared to "low float" stocks in traditional markets, where limited actively traded supply can lead to significant price movements.

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