The top 10,000 Bitcoin investors control a third of the supply
Important takeaways
- Bitcoin is a decentralized resource, but large amounts are controlled by a select few
- The top 114 addresses have almost 3 million BTC, 15.5% of the total supply
- The anonymous Satoshi Nakamoto has 5.2% of the supply
- MicroStrategy holds 0.68% of the supply
Whether you love or hate Bitcoin, the world’s first cryptocurrency has thrown the word “decentralized” into the modern vernacular.
But while Bitcoin is the closest thing to a decentralized asset out there, it’s worth noting that it has pressure points. Not central points of failure, but rather large owners who hold significant amounts of the currency. In some cases, enough to cause a serious stir if these coins were ever to hit the market at once.
Satoshi Nakamoto
The most obvious of the major holders is the anonymous founder Satoshi Nakamoto. Whether an individual or a group, Nakamoto holds approximately 1 million bitcoins from the early days. That equates to about 5.2% of the total supply – a very large number.
No one knows who Nakamoto is, but having this amount of coins in the hands of one person/entity is certainly a risk.
Coinbase even listed this factor as a risk to its business on its S-1 form when it went public in April 2021. Under the risk section, the company outlined “the identification of Satoshi Nakamoto, the pseudonymous person or persons who developed Bitcoin, or the transfer of Satoshi’s Bitcoins” as a risk to Bitcoin and, by extension, Coinbase’s business.
While speculating on Nakamoto’s identity is a fool’s game, and these coins could easily be lost forever, it’s easy to see how Coinbase listed this as a risk in its filing. The fact is that one entity or person has 5.2% of the supply and no one has any idea who.
Bitcoin whales
Looking beyond Nakamoto, there are many wallets that contain a lot of Bitcoin. A study by the National Bureau of Economic Research outlines that the top 10,000 bitcoin investors control a third of the total supply.
This figure is an estimate and is “probably an understatement since we cannot rule out that some of the largest addresses are controlled by the same entity”, according to the study. For example, it does not include the aforementioned 5.2% of coins controlled by Nakamoto, since it cannot be known if Nakamoto is one individual.
Since Bitcoin returned the equivalent of 230% compounded annually between 2011 and 2021, and in doing so outperformed every major financial asset class in the world, it is perhaps not surprising that a small group of early adopters control significant amounts of supply.
A $2,000 investment in 2010 would have given you 10,000 bitcoins, which today is worth over $26 million. The select few who got involved in the early days and hold their stocks today have significant amounts of the supply.
Today, only 114 addresses contain 10,000 BTC or more (with exchange addresses likely some of them), and those 114 addresses contain nearly 3 million BTC, or 15.5% of the total supply.
The table below shows quite how much Bitcoin is locked up in a small number of the top addresses.
Devices that hold large amounts of Bitcoin
Branching out from individuals, there are also entities that hold huge amounts of Bitcoin.
The first to come to mind is Michael Saylor and MicroStrategy, who own 130,000 bitcoins, 0.68% of the total supply. This is the most of any public company, and some fear that if this were ever to come to market, the Bitcoin price could be dented, such is the amount of bitcoins that MicroStrategy holds.
While MicroStrategy is the public company with the most Bitcoin, the private Chinese company Block.one, which developed the cryptocurrency EOS, owns 140,000 bitcoins. This makes it the largest known holding of a company.
MicroStrategy has purchased an additional 301 bitcoins for ~$6.0 million at an average price of ~$19,851 per #bitcoin. From 19.09.22 @Microstrategy has ~130,000 bitcoins bought for ~$3.98 billion at an average price of ~$30,639 per bitcoin.
— Michael Saylor⚡️ (@saylor) 20 September 2022
Final thoughts
It is true that Bitcoin’s unique fundamentals make it a uniquely decentralized asset. The way the proof-of-work mechanism works and the fact that no insider started with any coins (even Nakamoto had to mine that stash) have helped make this decentralized quality a reality.
However, despite this decentralization, there are several large owners who have enough coins that the market could be shaken, at least in the short term, if something were to happen that caused these coins to hit the market.
The scale of Bitcoin’s rise has been so staggering that some of the early casuals who bought in for pennies are now in possession of monster stacks worth millions upon millions. As for Satoshi Nakamoto’s November 2021 Net Worth at Bitcoin All-Time High? Cool $70 billion, good for 15th the richest person in the world.
