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FameEX Hot Topics | Grayscale Report Explores Bitcoin's Extensive Ownership and Resilient Supply Dynamics

2023-12-01 16:28:56

A recent report by Grayscale Investments challenges the notion of Bitcoin (BTC) ownership being concentrated by revealing that 74% of Bitcoin addresses hold less than $350 worth of BTC. However, roughly 40% of the Bitcoin supply is controlled by institutions like exchanges, miners, governments, public companies, and long-term holders.


Grayscale, one of the largest digital asset managers by assets under management (AUM), published a study discussing Bitcoin ownership. The report delves into the concept of "sticky supply" in Bitcoin and explores its significance in the current environment, as well as potential implications for the cryptocurrency's future.


While the majority of Bitcoin owners are individual retail investors located worldwide, significant portions of the cryptocurrency are held by large entities, including crypto exchanges that cater to millions of users and governmental entities. The report also highlights other major Bitcoin holders, such as mining companies that secure the network, publicly traded companies like MicroStrategy, exchange-traded funds (ETFs), trading platforms, and addresses that have remained inactive for over a decade.


Grayscale's study suggests that certain ownership groups exhibit "sticky supply," resisting selling during price fluctuations. For instance, addresses that have been inactive for a decade reached an all-time high, and the balances held by miners and exchanges have remained stable despite Bitcoin's price volatility.


This characteristic of inelasticity could amplify the price impact of external events that generate new demand, such as the Bitcoin halving event in 2024 or potential approval of a U.S. spot Bitcoin ETF. Grayscale's report notes, "Given the various inactive or price inelastic Bitcoin ownership groups, this dynamic could prove particularly relevant to Bitcoin." The study anticipates that ownership dynamics will increasingly influence Bitcoin's price response as illiquid supply grows and short-term supply decreases.


The analysis by Grayscale underscores Bitcoin's broad distribution among both individual and institutional investors, signaling its growing acceptance and evolution in the mainstream financial landscape. Simultaneously, the report suggests that Bitcoin's limited supply may strengthen positive market forces.


In conclusion, the report states, "If these trends persist, the Grayscale Research team anticipates that the dynamics of Bitcoin's ownership could increasingly amplify the impact of macroeconomic events." This implies that ownership patterns may play a more significant role in shaping Bitcoin's response to external factors over time.


Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.

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