Bitcoin is the largest and most valuable cryptocurrency in the world. Therefore, it has a strong influential impact on the rest of the market. Several coins follow its bullish or bearish momentum. Bitcoin is said to set the tone of the market, as its dominance has been incredibly high in the sector. Though Bitcoin has lately touched its all-time highs again after months of bearish patterns. But there is still some uncertainty about the scope of the coin in the minds of the investors.
Being the oldest coin in the market, the supply and demand dynamics of Bitcoin keeps on swinging. Bitcoin has a limited maximum supply of 21 million tokens. However, the problem is that its ownership is currently quite saturated. A recent study by the National Bureau of Economic Research (NBER) found out that one-third of the top crypto token is owned by its top 10,000 investors. Even though the coin is reaching new heights, its concentration to a few investors can be a concerning point for the overall market.
3 million BTC are held by top 1000 investors
The recent study also suggested that top 10% BTC miners control about 90% of the token’s mining capacity. Plus, only about 50 miners control half of the coin’s mining capacity. This high concentration can lead to more vulnerability in the Bitcoin network, and could expose it to a 51% attack.
Researchers from NBER found out that individuals hold more Bitcoin than the intermediaries. But the main issue is that the top 1000 individual investors control about 3 million Bitcoins. The study also suggests that the accurate data for this concentration level could also be higher than this. The researchers, Igor Makarov and Antoinette Schoar added that this estimation could be an understatement, as many large addresses could also be held by the same entities.
The study did not account the data for the early Bitcoins that were held in 20,000 addresses by the name of Satoshi Nakamoto, the pseudo founder of Bitcoin. He categorized these Bitcoins to 20,000 individuals. In conclusion, the report explained that this concentration could pose a risk to the cryptocurrency industry. The disproportions of the profit gained by the price hike of the coin could also be a problem for small investors. Nonetheless, Bitcoin along with the rest of the crypto market is preparing for a solid bull run in the coming days. This could push several crypto tokens to new all-time highs.