It’s been a big year for Bitcoin adoption.

A handful of athletes and politicians now take a portion of their salaries in Bitcoin, El Salvador made it legal tender, and there are three Bitcoin futures ETFs trading on the Chicago Board Options Exchange. 

Still, the vast majority of the volume, about 75% of it, gets moved from one exchange to another, and a fairly small number of “rich” wallets control more than a quarter of the circulating supply, according to a report from the National Bureau of Economic Research.

The report isn’t exactly new. It’s a working paper that was published on the NBER website in October using data collected through the end of June. But its findings got a bump this morning when the Wall Street Journal reported that “0.01% of Bitcoin holders control 27% of the currency in circulation.”


The top 1,000 investors control about 3 million, or 16%, of all circulating Bitcoin, and the top 10,000 investors own around 5 million, or 27%, of Bitcoin, according to authors Igor Makarov of the London School of Economics and Antoinette Schoar of MIT’s Sloan School of Management.

At the time the researchers compiled their data in late June, there were about 18.7 million Bitcoin in circulation and 787,000 active wallet addresses, according to Glassnode. For perspective, there’s now 18.9 million Bitcoin in circulation and 733,000 active addresses.

And the Bitcoin price, which was sitting at $34,493.20 in June, has risen about $13,000 to $47,222.70 as of this writing.

But it is important to point out that the researchers used clustering algorithms to separate addresses controlled by the same entity, like exchanges or hedge funds, from addresses controlled by individual investors. If the data included wallets controlled by big firms (think Coinbase), that 0.01% stat would be higher.


“Our data cover 1,043 different entities,” the authors write. “These include 393 exchanges, 86 gambling sites, 39 online wallets, 33 payment processors, 63 mining pools, 35 scammers, 227 ransomware attackers, 151 dark net marketplaces, and illegal services.”

But the apparent concentration of wealth hasn’t dulled interest from investors looking to back the next big thing in blockchain.

This year, $30 billion of venture capital has poured into digital asset, blockchain, Web3, and metaverse startups, according to transaction data analyzed by PitchBook.

“We’ve moved beyond just digital gold," Spencer Bogart, general partner at Blockchain Capital, told Bloomberg. "We’ve got financial services, art, gaming as a subcategory of NFTs, Web 3.0, decentralized social media, play-to-earn—all of that made investors think, 'We don’t have enough exposure.'"

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