Bitcoin supply is becoming less concentrated on whales: data
Data from Glassnode has revealed that the Bitcoin supply is gradually spreading from whales and exchanges to smaller hands over time.
Bitcoin supply shows slow spread towards smaller holders
According to a new report published by the chain analysis firm Glassnode, investors with less than 50 BTC have recently absorbed the most significant volume of coins.
Something BTC critics often hold up against the cryptocurrency is the distribution of supply. They claim that the supply is highly concentrated around a few whales, giving the existence of large wallets as evidence.
To check whether this fact holds, Glassnode studied the supply distribution of the market by dividing investors into different cohorts. These keeper groups are defined by the research firm as follows: shrimp (<1 BTC), krabbe (1-10 BTC), blekksprut (10-50 BTC), fisk (50-100 BTC), delfin (100-500 BTC) , hai (500-1.000 BTC), hval (1.000-5.000 BTC) og pukkelrygg (>5,000 BTC).
The supplies to exchanges and miners are also considered for the classification. A relevant indicator here is the “annual absorption rates”, which measure the annual change in the supplies of the different cohorts as a percentage of the total amount of coins issued (that is, the fresh supply miners produce).
First, here’s a chart showing how annual absorption rates for shrimp and crab have changed over the cryptocurrency’s lifetime:
Looks like the metrics have shown high values in recent days | Source: Glassnode
As shown in the graph above, the Bitcoin shrimp and crab have recently seen record absorption rates of around 105% and 119% respectively.
This means that the shrimp supply has grown by 105% of what the miners produced over the past year, while the crabs have added an even more significant percentage of 119%.
Even though the BTC miners gave out 100% of what they mined in the last year, these groups still absorbed an extra supply. Where did these extra coins come from? The absorption rates of the other cohorts may hold the answer to that.
The absorption rates of the sharks and whales | Source: Glassnode
From the chart it is clear that sharks have had a slightly positive annual absorption rate recently. The whales have still seen a negative indicator value, which suggests that this cohort has spread out over the past year.
The combined change in supplies to both of these cohorts is also a net negative since the distribution of the whales far outweighs what the sharks accumulated during this period.
Data for the absorption rates of the exchanges also show negative values, which suggests that these platforms have released many coins in circulation.
The highly negative absorption rates shown by exchanges | Source: Glassnode
The smaller Bitcoin entities have picked up the coins distributed by these cohorts. Interestingly, while this shift in offering has been extremely recent, it is a trend that has persisted over the years.
As the chart below highlights, the supply held by smaller entities (with less than 50 BTC) has gradually gained dominance throughout cryptocurrency history.
The rise of the shrimps and other small investors | Source: Glassnode
Although the proportion of the whales may have been quite significant at one time, today their stocks have shrunk to only 34.4% of the entire circulating supply, which, while still significant, is much smaller than the 62.7% around the time of the whales. first halving, the events that halve BTC mining rewards, back in 2012.
The gradual shift in supply also seems to go towards the smallest units, which are the retail investors. This is a sign that cryptocurrency is becoming more widespread as adoption increases.
BTC price
At the time of writing, Bitcoin is trading around $24,300, up 10% in the last week.
BTC observes a pullback | Source: BTCUSD on TradingView
Featured image from Dmitry Demidko at Unsplash.com, Charts from TradingView.com, Glassnode.com
