A new report from Grayscale Investments reveals that bitcoin ownership is more widely distributed than commonly believed, with 74% of addresses holding less than $350 worth. However, around 40% of bitcoin supply is concentrated among institutions like exchanges, miners, governments, public companies, and long-term holders.
Grayscale Research Team’s Bitcoin Analysis — Supply Dynamics Poised to Jolt Markets
Grayscale Investments, one of the largest digital asset managers in terms of assets under management (AUM), has published a study that discusses bitcoin (BTC) ownership. Grayscale delves into the “stickiness” of bitcoin’s supply, exploring why the firm believes this aspect is especially pertinent at present, and its potential implications for the asset going forward.
While the majority of bitcoin owners are small retail investors spread across the globe, sizable portions are held by large entities like crypto exchanges, representing millions of users, as well as governments. The report highlights how there are other major owners including mining companies securing the network, public companies like Microstrategy, exchange-traded funds (ETFs), trading platforms, and dormant addresses inactive for over ten years.
Grayscale’s study says that some ownership groups seem to represent “sticky supply” that resists selling during price swings. For example, the researchers highlight decade-long inactive supply recently hit an all-time high, while miner and exchange balances have remained steady despite bitcoin’s volatility.
This inelasticity could amplify the price impact of external events that drive new demand, like the 2024 halving or a potential U.S. spot bitcoin ETF approval. As Grayscale notes, “Given the various inactive or price inelastic bitcoin ownership groups, this dynamic could prove particularly relevant to bitcoin.” The study anticipates ownership dynamics increasingly affecting bitcoin’s price response as illiquid supply grows and short-term supply shrinks.
Grayscale’s analysis highlights how bitcoin’s widespread distribution among both individual and institutional investors signifies its growing mainstream acceptance and evolution. Concurrently, the report notes that a limited supply may enhance positive market forces, according to the researchers.
Concluding the report, it states, “If these trends continue, the Grayscale Research team anticipates that the dynamics of bitcoin’s ownership could increasingly amplify the impact of macro events.”
What do you think about Grayscale’s report about bitcoin’s distribution among different entities and the “sticky supply” scenario? Share your thoughts and opinions about this subject in the comments section below.