Bitcoin ownership highly concentrated as top 10k holders control over one-third of BTC supply

• Despite the growing popularity of Bitcoin, a study found that the coin’s supply is largely dominated by big players in the market.
• One-third of the circulating BTC supply is controlled by the top 10,000 investors.
• The top 10% of miners control 90% of Bitcoin mining capacity as concentration continues to be high for the crypto asset.

A recent study found that Bitcoin ownership is highly concentrated, as one-third of the leading cryptocurrency is held by the top 10,000 individual BTC investors. While the bellwether cryptocurrency recently surged to a new all-time high, its popularity has not changed one of its original attributes.

Top 1,000 Bitcoin holders control 3 million BTC

A study by the National Bureau of Economic Research (NBER) found that the top 10,000 individual investors in Bitcoin control roughly one-third of the BTC in circulation. 

NBER researchers found that intermediaries controlled around 5.5 billion BTC at the end of 2020, while individuals controlled around 8.5 billion Bitcoin. The top 1,000 individual investors controlled around 3 million, and the study further suggests that the concentration could be even higher. 

Researchers Igor Makarov and Antoinette Schoar stated that the measurement of concentration could most likely be an understatement, given that some of the largest addresses could be controlled by the same entity.

The data presented in the research did not assign the ownership of early Bitcoins that were held in 20,000 addresses by the same individual, Satoshi Nakamoto, and categorized them as belonging to 20,000 individuals instead.

The study further revealed that the top 10% of miners control 90% of Bitcoin mining capacity, while 0.1% of miners control 50% of mining capacity. 

However, the concentration of BTC ownership decreases after sharp increases in Bitcoin price, making the network more vulnerable to a 51% attack when the bellwether cryptocurrency plunges. 

The researchers conclude that despite the skyrocketing popularity that Bitcoin has received over the past few years, the ecosystem is still dominated by large and concentrated players, which could put the cryptocurrency at systemic risk. The study also highlighted that most of the gains from further adoption might likely fall disproportionately to a small set of participants. 

Bitcoin price discovers strong foothold to resume rally

Bitcoin price has recently dipped below $60,000 as the leading cryptocurrency tested the 100 four-hour Simple Moving Average (SMA) as support. Currently, BTC is testing the reliability of the 50 four-hour SMA as a foothold before it can resume its rally.

The bulls are desperate for Bitcoin price to resume its uptrend after it fell below the lower boundary of the ascending parallel channel. Now, BTC must stay above the 50 four-hour SMA at $62,419 for the bellwether cryptocurrency to have a chance to climb higher.

BTC/USDT 4-hour chart

The next target for BTC is at the 50% Fibonacci retracement level at $63,269, then at the 61.8% Fibonacci retracement level at $64,154. Additional headwinds may appear at the downside trend line of the parallel channel at $64,822 before additional directional intentions are revealed.

The first line of defense for Bitcoin price is at the 50 four-hour SMA, then at the 38.2% Fibonacci retracement level at $62,283. Additional support may emerge at the 21 four-hour SMA at $61,454. 

 

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