Retail Helps Distribute Bitcoin Supply

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Retail holds 14% of supply

One of the most common criticisms of Bitcoin’s Fear, Uncertainty, and Doubt (FUD) is that the majority of supply is highly concentrated in the hands of a few. Like any financial system or asset class that exists today, there is some truth to this type of distribution, but it’s almost always exaggerated in the case of Bitcoin.

The share of Bitcoin supply held by esteemed retailers has taken more network share every year. It is one of the only assets in the world that anyone with an internet connection and a smartphone can obtain, with incredibly low adoption frictions for the common individual.

Many reviewers cite an address chart like this and call it truth. The truth is, tracking supply distributions between addresses is incredibly nuanced and that’s one of the main reasons why Glassnode used a suite of heuristics and clustering algorithms to estimate entities, rather than addresses. , on the network.

What Glassnode found in its analysis a year ago is that:

“We can deduce that around 2% of network entities control 71.5% of all Bitcoins. Note that this figure is significantly different from “2% controls 95% of the supply”.

And that 71.5% was an upper bound, that is, a high estimate of the concentration of the supply distribution. There are many reasons why the retail share is likely higher due to bitcoin with custodians, supply on exchanges, lost coins, and a conservative methodology to identify entities.

Digging into entity supply distribution data today, we see a clear trend of retail (entities holding less than 10 BTC) increasing their share of circulating supply by 1.51% in 2012 to 13.90% in 2023 on average. The largest share of supply growth comes from entities holding 1-10 BTC and 0.1-1 BTC.

Bitcoin held by retail investors continues to grow in amount and value.

Final remark

The data contributes to the argument that Bitcoin is a currency designed and accessible to the common global individual. While institutions and institutional capital entering the network is likely to be the next major price catalyst and will impact supply share, we continue to see retail network share increase as no anyone in the world can acquire and store bitcoins themselves.

This is a unique case study where, for once, individuals and individuals have access to assets and economic wealth before institutions.

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