The bitcoin (BTC) “mega-rich whale club”, owners of more than 10,000 BTC, is disappearing. Right now, those entities have around 3.75% of the total supply of coins in existence, according to data published by market analyst and blockchain data Willy Woo.
Through a Thread on Twitter, Woo laid out an analysis on the distribution of BTC over time. The great conclusion of this study is that “currencies move towards the masses” . In other words, more and more entities have bitcoins. What does decrease is the average amount of BTC in the hands of each one of them.
In his messages, the analyst highlighted that the data is based on unique entities and not on addresses, since each individual it can have an infinite number of addresses. “The addresses are grouped forensically to resolve them into individual participants,” he added.
Whales normally distribute coins while taking profits in bullish market runs, Woo explained. But seen in the long term, in general, whales tend to decrease , as shown in the graphs shared by the researcher.
The «minnows» eat bitcoins from the whales
The data shows that as the largest whales become less and less common, “minnows” like refers to owners with less than 10 BTC, already accumulate 13.6% of the bitcoins in circulation .
Woo argued that that The class of owners could outnumber whales in percentage of coins (entities with 1,000 or more BTC), who have a total of 26% of the supply.
Although the so-called “minnows” have half of those Bitcoins, in percentage, the picture changes if the funds held by exchanges and investment funds are taken into account. Being entities that have custody of the currencies of thousands of users, in addition to their own, their ownership is also related to small investors. Adding up all those coins, there is more than 30% of the bitcoin supply .
It may seem that the “minnows” have nothing but crumbs that the whales leave in their wake. However, the long-term revaluation of the cryptocurrency causes the average BTC per user to be lower and lower, but its equivalent in fiat money .
Another recent investigation by Woo, reported in CryptoNews, places the current average between 0.25 and 0.69 BTC per head, clearly below the average of a couple of years ago, around 1 BTC.
Despite the decrease in individual holding denominated in bitcoin, in dollars the figure has only increased. With an average of 0.69 bitcoins per person, the average holding of BTC exceeds $ 20,000 , a figure that until December of this year had not exceeded a full bitcoin.
Although the school of small fish is increasing, Woo considered that “The story for 2021 is the rise of dolphins and sharks “. That class of BTC owners, those who have between 100 and 1,000 bitcoins, shows a clear increase in recent times.
The student of Bitcoin metrics sees this growth closely related to market entry from “high net worth individuals, family offices, hedge funds and smaller corporate treasuries.” These entities, he said, “absorbed much of the whale distribution.”
Lost Coins, Saved Coins and Spent Coins
From his calculations, Woo excluded the coins known as the property of Satoshi Nakamoto, the pseudonymous creator of Bitcoin. The total of Nakamoto’s coins is equivalent to 5.8% of the BTC supply , which would make him a mega whale if considered.
The exclusion of Satoshi coins occurs because it is about lost BTC, as argued Woo. The bitcoins of the person who created the cryptocurrency more than a decade ago have not moved after being mined, which coupled with Satoshi’s silence all these years gives the idea that these coins will not really circulate in the network .
In fact, there are those who give up not only Satoshi’s coins, but all those that have not moved in more than 10 years. As the HODL Waves graph from Unchained Capital shows, we would be talking about more than 11% of the total bitcoins out of circulation.
That same graph also supports Woo’s appreciation of the behavior of whales in bull markets and how the accumulation of bitcoins is oscillating . During price spikes in market cycles, we also see spikes of younger coins (which have moved from their directions more recently), spent in a short time. On the other hand, when the price falls, the increase in the long-term accumulation can be appreciated, with bitcoins that spend more time without changing hands.
Incorrect readings of data affect the price of bitcoin
To conclude his analysis, Woo pointed to something that he has already pointed out insistently: the incorrect reading of data from the Bitcoin blockchain like this one of the distribution, can cause uncertainty in the market. Consequently, market falls are generated that do not correspond to the reality of the fundamentals of the network , in his opinion.
As shown From this appreciation, the researcher contrasted two graphs on the holding of bitcoins: one in the long term, based on entities; and another with a range of only one year and based on addresses (which, as we have indicated, could belong to the same individual entity).
If you look at the short term and directions only, it would appear that there was a spike and a sudden drop in savers with at least 1 or more BTC. This can lead to misconceptions about supposed massive liquidations on the part of bitcoin owners, when in reality “the whales execute an orderly distribution in each bull market”, in the words of Woo.
That is, the whales are not selling all their BTC, leaving the market completely. Rather, they take profit chunks by selling just a part of their total bitcoin fund. The rest, they save in the long term.
