1,600 Wallets Own a Third of all Bitcoin

Whales own the cryptocurrency market. Chainalysis, a well-known cryptocurrency analysis firm, has reported that over 1/3 of all Bitcoin is in only 1,600 wallets. Each of these wallets have more than 1,000 Bitcoins, with 100 of them containing over 10k Bitcoin or $75 million USD at current value.

As Chainalysis chief economist Phillip Gladwell states:

“This concentration of wealth means that bitcoin is at risk of volatility as the moves of a small number of people will have a large price effect.”

We have seen this before in numerous cases, with whales suppressing prices to buy more at lower prices or pumping prices to sell off at a massive profit. The most notable recent case has been when the trustee of Mt.Gox dumped thousands of Bitcoin on public exchanges, fueling a massive price drop.

Chainalysis has found that the amount of Bitcoin held by long-term holders has been decreasing, relative to the amount of Bitcoin held by short-term holders. This means that there has been a shift in power dynamic, with the market movement power of short-term speculators growing.

Other Cryptocurrencies in the Same Boat

Careful research from Reddit users show that the top 10 EOS wallets hold about 50% of all EOS tokens, close to 500 million tokens; meanwhile to a lesser degree, the top 400 Litecoin wallets contain 50% of all Litecoins in circulation.

It is speculated that most of these wallets are owned by exchanges who hold the cryptocurrencies when a customer transfers their tokens into the exchange for trading.

However, many analysts think that when adoption in this market grows, that cryptocurrencies will start to spread thin throughout an ever-growing quantity of wallets. But until that occurs, many will still worry about whales manipulating the marketplace, dragging prices to where these whales need them to be.

Categories Bitcoin Cryptocurrency EOS Litecoin

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