The top 10,000 bitcoin investors control a third of the supply

main sockets

• Bitcoin is a decentralized asset, yet large amounts are controlled by a select few
• The top 114 addresses hold nearly 3 million bitcoins, which is 15.5% of the total supply.
• An unknown Satoshi Nakamoto owns 5.2% of the supply
• MicroStrategy owns 0.68% of the offer

Whether you love or hate Bitcoin, the world’s first cryptocurrency has caught the word.decentralization in modern vernacular.

But while Bitcoin is the closest thing to a decentralized asset, it is worth noting that it does have pressure points. Not the central points of failure, but the large holders who own large amounts of the currency. In some cases, it is enough to cause a serious stir if these coins hit the market all at once.

Satoshi Nakamoto

The clearest of the big holders is the anonymous founder, Satoshi Nakamoto. Whether it was a single person or a group, Nakamoto owned close to 1 million bitcoins from the early days. That equates to about 5.2% of the total supply – which is quite a lot.

No one knows who Nakamoto is, but having that amount of coins in the hands of one person/entity is certainly a risk.

Coinbase even listed this factor as a risk to its business in the form of an S-1 when it went public in April 2021. Under the risk section, the company explained “Identification of Satoshi Nakamoto, the pseudonymous person or persons who developed Bitcoin, or the transfer of Satoshi’s Bitcoins” As risks to Bitcoin and, by extension, Coinbase’s business.

While speculating on Nakamoto’s identity is a tricky game, and these coins can easily be lost forever, it’s easy to see how Coinbase listed this as a risk to their safekeeping. The truth is that only one entity or person owns 5.2% of the supply, and no one has any idea who.

Bitcoin whales

Looking beyond Nakamoto, there are a lot of wallets that hold a lot of bitcoin. One study by the National Bureau of Economic Research states that the top 10,000 Bitcoin investors control a third of the total supply.

This number is my estimate.That’s probably an understatement since we can’t rule out that some of the biggest titles are controlled by the same entity. According to the study. For example, it does not include the above-mentioned 5.2% of coins controlled by Nakamoto, since it is not possible to tell if Nakamoto was a single individual.

Given that Bitcoin returned the equivalent of a compound 230% annually between 2011 and 2021, outperforming every major financial asset class in the world, it is perhaps unsurprising that a small group of early adopters control large amounts of the supply.

An investment of $2,000 in 2010 would have netted you 10,000 bitcoins, which today is worth more than $26 million. The select few who participated in those early days and kept their stash today have ample amounts on offer.

Today, just 114 addresses hold 10,000 bitcoins or more (with exchange addresses likely some) and those 114 addresses contain close to 3 million bitcoins, or 15.5% of the total supply.

The table below shows how much Bitcoin is locked up in a small number of the most important addresses.

Entities that own large amounts of bitcoin

Branching out from individuals, there are also entities that hold massive amounts of bitcoin.

The first thing that comes to mind is Michael Saylor and MicroStrategy, who own 130,000 bitcoins, which is 0.68% of the total supply. This is more than any public company and some fear that if this happens in the market, the price of bitcoin could drop even lower, like the amount of bitcoins held by MicroStrategy.

While MicroStrategy is the public company with the largest number of Bitcoins, private Chinese company Block.one, which developed the EOS cryptocurrency, holds 140,000 Bitcoins. This makes it the largest known holding by any one company.

MicroStrategy bought an additional 301 bitcoins for about $6.0 million at an average price of $19,851 each. # Bitcoin. As of 9/19/22 @employee It holds approximately 130,000 bitcoins obtained for $3.98 billion at an average price of around $30,639 per bitcoin.

– Michael Saylor (@saylor) September 20, 2022

Final thoughts

It is true that Bitcoin’s unique fundamentals make it a uniquely decentralized asset. The way the proof-of-work mechanism works and the fact that no insiders started any coins (even Nakamoto mining this vault) helped make this decentralized quality a reality.

But despite this decentralization, there are many large holders who own enough coins that could shake up the market, at least in the short term, had anything ever happened that knocked those coins into the market.

So staggering has been the scale of Bitcoin’s rise that some of those early adopters who bought for pennies now own monster stacks worth millions and millions. As for Satoshi Nakamoto’s net worth in November 2021 at an all-time high for Bitcoin? Cool $70 billion, good for 15^y The richest person in the world.