Big Fish in the Crypto-Pond – Who Owns All the Bitcoin?

Even if you’re sitting on what you consider a sizable number of Bitcoin, or a Litecoin horde that would make you rich if you sold it all, you’re almost certainly not as big a fish as you might think. Neither are most of the millions of other wallet owners. The majority of the world’s digital currency is owned by just a few thousand wallets. Though the owners are anonymous, they are absolutely, stinking rich.

Few would have predicted in early 2017 that, by the tail end of the year, Bitcoin and other cryptocurrencies would increase in value by factors of thousands of percent. Many jumped on the bandwagon late and found themselves floundering as prices crashed down. The problem was so severe that banks stepped in to curtail Bitcoin purchases.

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The recent correction didn’t shake the biggest owners of cryptocurrency, however. A few crypto-whales are sitting on a stash of Bitcoin, Litecoin, and Dash worth billions of dollars, and they’re not selling. Instead, most of them continue to buy, hoarding masses of cryptocurrency, gradually migrating Bitcoin and altcoins into the hands of the crypto elite.

Bitcoin ownership by the numbers

According to statistics put together by BitInfoCharts through parsing the blockchain, of roughly 23 million Bitcoin wallets in existence, more than 13 million of them own only a fraction of a Bitcoin. While many in number, they make up a minuscule portion of the overall financial landscape.

At the other end of the scale, only 1,500 addresses have between 1,000 and 10,000 Bitcoins in them. The top 111 wallets have more than 10,000 Bitcoins a piece. That’s tens of millions of dollars’ worth of cryptocurrency in each wallet.

The 100 largest Bitcoin wallets are together worth $28.6 billion.

Using BitInfoChart’s latest calculations, 87 percent of all Bitcoins ever mined are owned by just half a percent of Bitcoin wallets. The figures only tighten from there. 61 percent of all Bitcoins are owned by just 0.07 percent of wallets. That’s an incredible amount of wealth in the hands of very, very few.

The second largest wallet in the world contains 163,133 Bitcoins, worth around $1.6 billion. It’s thought to be a cold storage wallet — a Bitcoin wallet kept offline to avoid hacking – owned by BitFenix, a cryptocurrency exchange. That may be the case for many of the largest wallets; the frequency of payments in and out give a hint to such an identity. Whoever owns them, they are sitting on vast fortunes. There are over 100 Bitcoin wallets around the world with a collective $28.6 billion worth of Bitcoin in them, and that’s with a price half that of the December 2017 peak.

Tantalizingly, there’s many wallets in the top-100 richest that haven’t been touched in a long time. Some of those, like the 9th most full Bitcoin wallet in the world – worth around $657 million — have never taken any Bitcoin out, and haven’t had a meaningful input since 2014. These are classed as “dormant” wallets. They could be true long term holders who want to see where the market goes, or part of the millions of Bitcoins thought lost to wiped hard drives, forgotten passwords, and other problems.

graph showing largest volume of bitcoin in a wallet as of March 12, 2018

Many large wallets are active, however, and the largest Bitcoin wallets are getting larger. The single most packed Bitcoin wallet in the world increased its holdings by 60,000 Bitcoins in the last days of 2017. While it’s transferred out a few thousand since, it seems clear that it was taking advantage of the big dip that hit Bitcoin pricing following its latest surge. The number four wallet followed a similar pattern in early 2018.

The spread of wealth among the whales of other cryptocurrencies is much the same and, if anything, the largest altcoin wallets are even less keen on trading out their currency than the key Bitcoin owners. In the case of Litecoin, 70 addresses — less than .001 percent of all Litecoin wallet addresses in existence — own more than 23 million Litecoin. That’s 42 percent of all holdings. Just 0.15 percent of Litecoin wallets – around 3,200 of them – control more than 70 percent of the total. The top 30 percent of Litecoin wallets control 99.62 percent of all Litecoin in existence.

While an argument can be made that some the top Bitcoin wallets with lots of ins and outs are owned by exchanges due to their frequency of transactions, the infrequency of Litecoin wallet transfers suggest they are more likely owned by wealthy investors. Of the top 10 wallets, only one has ever moved Litecoin out. That wallet first purchased Litecoin in 2014 and has brought in, and transferred out, hundreds of thousands of Litecoin in the following years.

What do these numbers mean?

The hoarding of wealth by a slim number of wallets gives those owners incredible power. Like stock traders, if the largest Bitcoin wallet owners decided to cash out, it could send prices tanking, leaving the much smaller investors concerned about what to do with the…

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