New research has further demonstrated that Bitcoin is highly concentrated, with less than 1% controlling 27% of its circulating supply.
The total supply of the main cryptocurrency, Bitcoin, now stands at around 19 million. While many praise the decentralized nature of the asset, a recent study revealed that the coin may be more centralized than we think, as just a tiny fraction of all wallet addresses hold nearly a third of the coin’s total circulation.
0.01% of wallets control 5 million units of Bitcoin
Wall Street Journal reported the result of a recent study conducted by the National Bureau of Economic Research on Bitcoin. According to report, about 0.01% of Bitcoin addresses hold 27% of all coins in circulation.
Approximately 0.01% of Bitcoin holders control 27% of the 19 million Bitcoin in circulation.
This means that of the 19 million mined Bitcoins that are currently in circulation, 27% of them, representing 5 million Bitcoin units (valued at $232 billion), are in control of 0.01% of wallet addresses (equivalent to to 10,000 cryptocurrency addresses). As per the recent data, approximately 114 million wallets contain all 19 billion units of Bitcoin currently in circulation.
In another study, professors at the Sloan School of Management and the London School of Economics at MIG analyzed all transactions made so far in the history of Bitcoin.
According to them, this excessive concentration makes it highly centralized, as just a few wallet addresses control the largest fraction of all Bitcoin in circulation. They believe that this type of situation makes Bitcoin vulnerable to systemic risk, as smaller groups (whales) can determine the asset’s performance.
Bitcoin’s recent price performance
The cryptocurrency market for the past few weeks has been bearish, especially after Bitcoin hit a new ATH above $68,000 on Nov.
Although the asset price has risen in the last 24 hours by more than 6% to $49,021, corresponding to 1.56% in the last 7 days, the Dice show that it has lost about 15% of its value in the last 30 days.