Small Bitcoin holders have consistently increased over time at the expense of whales, particularly since the collapse of FTX.
Between 2021 and 2023, nearly one million Bitcoin addresses were amassed over one Bitcoin. The event drove Bitcoin’s price back to $15,500 for the first time since 2020, giving HODLers a more significant opportunity to stockpile sats.
In the days following FTX’s insolvency, manufacturers of individual crypto hardware wallets saw record sales, indicating a widespread shift towards individual wallets over centralized exchange wallets. This also explains the increase in smaller address balances, as exchanges frequently combine thousands of users’ BTC into a single blockchain address.
Moreover, Blockchain intelligence firm Glassnode noted that “shrimps” – blockchain addresses with 1 BTC – have amassed a record 96.2k BTC in the month following FTX’s failure.
Long-term growth has also been observed in the number of wallets holding >0.1 BTC (4,289,243) and >0.01 BTC (11,724,266). Since at least 2018, the number of addresses carrying >10 BTC or >100BTC has remained relatively stable, while the number of wallets holding >1000 BTC has decreased by roughly 20% since 2021.
Only about 11% of Bitcoin’s supply is held by entities with more than 0.1% of all holdings, according to CoinMarketCap data. This is a relatively low level of asset concentration compared to other altcoins, such as Ethereum and Cardano, which have concentration rates of 39 and 33 percent, respectively.
In 2021, CoinMetrics analyst Nate Madrey proposed that Bitcoin’s Proof of Work consensus mechanism, which incentivizes miners to sell newly minted coins on the market rather than hoard them, is responsible for the cryptocurrency’s more even distribution.
