During the last few months, a few reports from mainstream media (MSM) outlets tried to prove that a large sum of bitcoin is controlled by a small group of people. Recently, Bloomberg claimed that â€œ2% of accounts control 95% of all bitcoin,â€ a claim that doesnâ€™t hold weight to onchain analysts. On Tuesday, Glassnode researcher Rafael Schultze-Kraftâ€™s latest report refutes this claim by MSM, stressing that bitcoin ownership is not highly concentrated.
Shrimps to Humpbacks: The Ocean of Bitcoin Entities
Oftentimes MSM outlets and reporters publish a story about the cryptocurrency ecosystem without much research and knowledge concerning digital assets. More recently, after bitcoin (BTC) surpassed the crypto assetâ€™s 2017 all-time high (ATH) and touched a new ATH in 2021, MSM reports concerning the digital currencyâ€™s ownership concentration have appeared.
The reporters usually leverage the â€˜Bitcoin Rich Listâ€™ stemming from the web portal Bitinfocharts, a page that shows BTC addresses with the largest holdings. Glassnode researcher Rafael Schultze-Kraft has debunked this theory, as others have in the past, by explaining that â€œbitcoin ownership is not highly concentratedâ€ but also adds that â€œwhales are accumulating.â€
Schultze-Kraft says that the issue with reports like the one published by Bloomberg is that these journalists simply comb the distribution of bitcoin across the networkâ€™s addresses. â€œThis leads to misleading statistics, which result in false narratives around BTC ownership among stakeholders,â€ the researcherâ€™s report notes. Highlighting the fact that not all bitcoin addresses are equal and bitcoin addresses should not be considered an â€œaccount.â€
â€œWe analyze the distribution of bitcoin across network participants, and show that BTC ownership disperses over time and is much less concentrated than often reported,â€ the Glassnode analyst said. â€œMeanwhile, BTC supply held by whales has recently increased, suggesting institutional investors are entering,â€ the researcher added. The report separates the network entities into specific marine species names including: â€œshrimps (5,000 BTC).â€
Schultze-Kraft says the Glassnode team also segregated the entities of known exchanges and mining operations into separate categories.
Conclusion: â€˜2% of Network Entities Control 71.5% of All Bitcoinâ€™
Miners have 9.7% while exchanges have 12.7% and 1,000 to 5,000 BTC whales category makeup 18.4% of the bitcoin supply distribution. â€œOn the large end of the spectrum, whales and humpbacks are the biggest non-exchange entities that together control around 31% of the bitcoin supply. These are most likely institutions, funds, custodians, OTC desks, and other high net worth individuals,â€ Schultze-Kraft emphasizes.
The researcher adds:
One particular figure in the Glassnode study shows the crypto assetâ€™s supply distribution across entities over time. â€œIn particular, it becomes apparent that the (relative) amount of BTC held by smaller entities has been growing over the course of Bitcoinâ€™s lifetime,â€ Schultze-Kraft adds. After a number of other figures and charts, the report highlights the misleading and unfactual claims made by Bloombergâ€™s financial contributor Olga Kharif.
â€œWe can derive that around 2% of network entities control 71.5% of all bitcoin,â€ Schultze-Kraftâ€™s report concludes. â€œNote that this figure is substantially different from the often propagated â€˜2% control 95% of the supply.â€™â€
What do you think about the recent report highlighting that bitcoin ownership is not highly concentrated? Let us know what you think about this subject in the comments section below.
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