Who Owns Bitcoin?

Bitcoin’s transparent public ledger reveals significant data about the distribution of the Bitcoin supply. By examining address tracking, public announcements, and data across multiple sources, we can identify the location of nearly 47% of all Bitcoin. A substantial part of the 21-million Bitcoin supply, including Satoshi Nakamoto’s coins, is estimated to be lost. Studies from Glassnode and Chainalysis estimate that approximately 4 million Bitcoin have been misplaced.

A considerable amount of Bitcoin can be traced back to exchanges, the Grayscale trust, and miners’ wallets. Entities like MicroStrategy and Tether have gathered substantial Bitcoin holdings, while about 5,500 Bitcoin are secured on the Lightning Network, and other quantities exist as wrapped Bitcoin (WBTC) on alternative blockchains.

Regular monitoring can track most Bitcoin estimates, such as well-known on-chain addresses associated with U.S. government seizures or monthly production updates from public Bitcoin miners. However, some holding details can be elusive. Private institutions may have disclosed Bitcoin holdings years ago but aren’t mandated to publicly announce updates. There’s also uncertainty around government holdings – for example, China’s potential possession of 194,000 Bitcoin from seizures, but the current accuracy of this figure is hard to verify.

Bitcoin on Exchanges

Out of the 2.3 million Bitcoin on exchanges, the bulk resides on Binance and Coinbase. This doesn’t account for Bitcoin held in investment custody products like Grayscale and Coinbase Custody. Binance’s share of Bitcoin on exchanges has escalated from less than 10% in 2019 to 30% today, with around 700,000 Bitcoin on their platform. This increase is mainly due to their dominance in the derivatives marketplace and their global footprint, in contrast to Coinbase, which is primarily a spot exchange with significant U.S. presence.

Over time, the proportion of circulating Bitcoin supply on exchanges peaked at 17.5% in March 2020 before reducing to 11.89%. We anticipate the declining trend of Bitcoin on exchanges to persist, as personal custody solutions gain popularity amongst a growing number of global adopters.

Bitcoin’s Illiquid Supply

The term “illiquid supply” refers to Bitcoin held by entities that infrequently sell, making these coins less readily available for trading. An entity’s Bitcoin holdings are considered illiquid if less than 25% of its received Bitcoins have been spent. Following the 2016 halving, Bitcoin’s illiquid supply as a percentage of circulating supply is at its highest, with accumulation by holders outpacing miner issuance.

Final Thoughts

Bitcoin has successfully appealed to a wide range of holders, ranging from individuals to corporations and nation-states. The supply is becoming more evenly distributed amongst this diverse group, evidenced by the rise in retail ownership, historically high levels of long-term holders, a declining amount of Bitcoin held on exchanges, and an increasing illiquid supply. As Bitcoin’s 21,000,000 hard-capped supply continues to be distributed among individuals, institutions, corporations, and nations worldwide, we expect these trends of increased distribution and declining concentration to persist.