Over $62 Billion Bitcoin is held in less than 1% of all addresses

08 Jan, 2019 | Updated: 08 Jan, 2019
by David Borman
News
Over $62 Billion Bitcoin is held in less than 1% of all addresses

It is being reported by 8BTC that just 0.7% of all existing Bitcoin addresses hold a whopping 86.9% of all Bitcoin in circulation, which comes out to about $62 billion. Alternatively, 97.2% of addresses collectively hold about 4.6% of circulating Bitcoin, or $3.2 billion.

Obviously, the majority of these massive wallets are owned by exchanges, and hence represent the funds of many, many people. Some however do belong to so-called "whales," that is, individuals who personnally hold large sums of Bitcoin, usually because they began buying very early in the cryptocurrency's life cycle and/or had large sums of fiat to put into it to begin with.

Whales have become a concern for Bitcoin because they can easily manipulate the price of Bitcoin by simply selling off some of their supply, causing a market dip, and then presumably buying back in on the dip they created. As of now, no clear path to stopping this has been found, though various forms of regulation could help. This type of activity is generally illegal in traditional financial markets, though that doesn't mean it doesn't still occur.

The article also points out that only 37% of Bitcoin addresses are economically relevant, as in they send and receive transactions regularly. Most addresses are simply dormant, presumably serving as cold storage or possibly forgotten about.

This does raise questions concerning Bitcoin as the herald of a new money to overturn the old financial system, as it seems the same thing is happening as always happens with money, very few hands end up controlling most of the supply.

Ultimately time will tell if this will continue to be an issue for Bitcoin, but there's no clear mechanism in sight that would change it any time soon.

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Read more about:Bitcoin (BTC)

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