Bitcoin is increasingly fascinating to institutional investors. However, despite the growing enthusiasm for this crypto, the share of the total supply stagnates at around 10% of the 21 million BTC that will one day be in circulation. Where did the rest of bitcoin go? Analysis of a surprising distribution.
A limited fraction of bitcoin in the hands of institutions
According to estimates compiled by several experts, barely 2.17 million bitcoins are currently in the coffers of institutional investors. This only represents 10.3% of the total stock of Bitcoin (BTC) that will be able to be mined.
This congruent share brings together the bitcoins held by:
- Bitcoin ETFs now listed in Canada and Europe
- Hedge funds specializing in cryptocurrencies
- Public and private companies that have invested in Bitcoin
- Some pioneering governments like El Salvador
- DeFi protocols and other centralized exchange services.
In short, all significant financial players, with the exception of individuals. The observation is striking: despite the gold rush, a minimal part of the treasure remains in their hands. Where did the rest of the precious bitcoin go?
Most of the stock dominated by individuals
The answer is that most of the existing Bitcoin (BTC) is held directly by individuals in every corner of the world. These millions of aficionados keep their wealth safe in digital wallets, protected from traditional financial intermediaries.
Some see this as proof that Bitcoin has retained its original libertarian and decentralized dimension, as opposed to classic finance. This dispersion of stock between individuals reflects the utopia of a digital currency escaping States and central banks.
Moreover, this rarity of available “institutional” bitcoin is seen as potential support for prices. Large buyers are ready to pay an ever-increasing premium to get their hands on an asset whose supply is inexorably drying up.
The implications for the future of crypto
This singular distribution, very unusual in the financial sphere, fuels the debate around the adoption of Bitcoin as a long-term store of value.
Some argue that its extreme decentralization in the hands of individuals will make its price very resilient, whatever future regulations.
Others believe that mass adoption by institutions will be necessary to stabilize a price that is still very volatile and unpredictable.
Where has bitcoin gone? Mostly in the digital wallets of individuals who continue to live the dream of the decentralized digital currency imagined in 2008. Institutional investors still control only a fraction of the stock, despite their growing appetite. An atypical distribution with crucial implications for the future of crypto.
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