Bitcoin Whales Dominance Hits All-Time Low As Long Term Holders’ Stash Continues To Balloon

According to blockchain analytics firm glassnode, Bitcoin whales’ dominance continues to diminish while coffers belonging to long-term holders continue to grow.

Bitcoin Adoption Surging

In recent years, and most notably since 2017, the rate of Bitcoin adoption has increased drastically thanks to the asset’s price run which has been fuelled by a huge number of retail and institutional money entering the crypto space. 

Data from Statista shows that the number of blockchain wallet users worldwide from December 2013 to November 22, 2021, increased by a staggering 8,810.11% with the total unique cryptocurrency wallets created currently standing at 79.3 million.

The largest adoption was however witnessed between January 2020 and January 2021 and is attributed to the emergence of peer-to-peer(P2P) trading and the entry into markets such as Africa and Asia.

In the budding years, only a few entities had access to Bitcoin. In 2013, over 50% of all the Bitcoins in circulation were still controlled by whales pitting the space against small bag holders and making the coins extremely vulnerable to cyber-attacks.

Events such as the infamous Mt.Gox and Silk Road heists plus the need to encourage mass adoption for the technology which sold itself as the best possible alternative to society’s collective anxieties around the financial system prompted the building of more decentralized platforms.

Whales Holdings Slashed By Half

The rise of crypto exchanges saw whales transact more selling portions of their holdings which were largely confined in wallets, a move that saw newer entrants scoop some coins for themselves and have since been stacking. This distribution has seen the number of new whale addresses surge impressively.

Whales are defined as single entities holding 1000+ BTC as seen on-chain. Exchanges, ETFs, and public company holdings are excluded as their BTC are owned by a multitude of individuals/shareholders.

As of January 1, 2022, the number of Bitcoins held cumulatively by whales hit an all-time low, at 24%.

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The Long Road To Decentralization

In 2021, a total of 1.846M BTC was added by Long-Term holders whilst the Short-Term holders declined by 1.428M BTC.

Generally, minnows (10-1000BTC) and corporate reserves continued to stack as reserves held publicly such as crypto exchanges and ETFs recorded a reduction in their Bitcoin holdings.

Although some crypto-users including Elon Musk have voiced concerns with Bitcoin’s centralism, Willy Woo predicts Bitcoin users could grow 3x to hit 1 Billion users worldwide before 2025, pushing the cryptocurrency closer to achieving full decentralization. This development could also see the number of whales drastically rise and the concentration of coins held by single entities drop.