Over Half of Bitcoins Parked in Digital Wallets
More than half of bitcoins are yet to be transacted as these virtual coins are sitting pretty in digital wallets, estimates by Diar showed.
“Data crunching by Diar shows that the majority of circulating Bitcoins, 55 percent, are sitting in wallets that are valued north of $1.3 million at current prices,” Diar said in a statement. This, as long-term investors are keeping the faith in the world’s first virtual currency despite the bears market this year.
Some 25 percent of all bitcoins are stored in such wallets which were created before last year’s price peak and have not made any outgoing transactions, based on projections. A quarter of all bitcoins is taken up by long-term investments, while the lost and illiquid ones comprises the other 30 percent.
“The wallets may have never made an outgoing transaction since November 2017, however current balances reflect new wallets, as well as Bitcoins added to the wallets,” Diar said.
“At pixel time, over 87 percent of Bitcoins are stored in wallets that are above 10 Bitcoins ($60K+) – the total value just shy of $100 billion of the total market capitalization. These coins sit in only 0.7 percent of all Bitcoin addresses,” it added.
For wallets with more than 100 coins, or about $640,000, the number declines to under 0.1 percent of all addresses but represent 62 percent of all outstanding bitcoins.
“The top-heavy ownership of Bitcoins of course does not indicate a select number of wealthy individuals solely however, as the largest wallets are owned by cryptocurrency exchanges that are holding the coins on behalf of clients. In fact, 3.8 percent of the total bitcoin supply are currently sitting in the top 5 wallets that are known to be managed by major exchanges – approx. $4.2 billion in value,” Diar noted.
In a previous analysis by blockchain analytics firm Chainalysis, 42 percent of bitcoins hidden in the investment wallets (more than 200 bitcoins) made no movement or transaction during the price peak in December last year and sat in wallets before the markets witnessed the bitcoin hitting close to $20,000.
Blockchain analytics firm Chainalysis also indicated in a report in April that as much as one third of the current bitcoin supply is concentrated in the hands of 1,600 individuals. “And 27 percent of these Bitcoin wallets have continued to add more coins to their stash since then.”
“The report placed, back in April, 1/3 of Bitcoin supply in the concentrated hands of 1600 individuals. But there is a cherry on top for long-term investors. Chainalysis places the possibility of 30% of Bitcoin supply to be lost, and unmined,” Diar said, citing the same report released earlier this year.
Incidentally, during the plunge which bitcoin sustained this year, the hashrate of the network has surged. This increasing hashrate could be considered a sign of the improving security infrastructure, further bolstering of the first virtual currency’s appeal, not least to long-term investors who can find refuge from the fact that the network is safer than before.