There is a strong concentration of Bitcoins in the cryptocurrency market. According to a recent report by the company CryptoQuant, more than 61% of all BTC circulating in the market today is in the hands of large crypto players. That is, investors who hold fortunes in digital assets.
CryptoQuant’s analysis took into account the “UTXO Value Bands”. This is an indicator that displays the distribution of all unspent transaction outputs (UTXOs) by their value. In practice, the metric allows you to analyze large and small participants in the cryptocurrency market and their holdings.
Analytical data shows that big Bitcoin players do indeed control a significant share of the market:
“Dolphins” (100-500 BTC) and “Sharks” (500-1,000 BTC) control 29.57% of the market. That is, these medium-sized players hold a substantial part of Bitcoins. Meanwhile, “whales” (1,000-5,000 BTC), “humpback whales” (5,000-10,000 BTC) and “megawhales” (>10,000 BTC) control 31.57% of the market. As the analytics firm put it, this highlights “the influence of these huge players in the cryptocurrency market.”
Bitcoin concentration problems
In this way, big investors together control 61.14% of all Bitcoins. As CryptoQuant highlighted, this has important implications for the industry.
Firstly, with this concentration of BTC, the market becomes more sensitive to the actions of the big players. When these investors buy or sell large volumes of Bitcoins, for example, it can cause significant price fluctuations in the cryptocurrency.
On the other hand, a smaller share of the market, around 38.86% of all Bitcoins, is in the hands of smaller participants and investors. And that means, according to CryptoQuant, that there is room for retail growth:
“This may suggest that cryptocurrencies are still a niche investment vehicle, and there is potential for further growth and greater participation from retail investors,” the company said.
According to the Bitcoin address balance distribution, the richest wallets, which control 31.57% of the market, are only 4,151 in number. That is, despite the growing popularity of cryptocurrencies, the big players are still relatively small in number.
