# Bitcoin: Who really owns it, the whales or small fry?



## Brendan Burgess (9 Jun 2018)

A really interesting FT article reproduced in today's Irish Times 

*Bitcoin: Who really owns it, the whales or small fry?*

Here are some excerpts but the full article is worth reading.

*‘Liquidity event’*
Indeed, Chainalysis estimates that longer-term holders sold at least $30 billion worth of bitcoin to new speculators over the December to April period, with half of this movement taking place in December alone.

“This was an exceptional transfer of wealth,” says Philip Gradwell, Chainalysis’ chief economist, who dubs the past six months as bitcoin’s “liquidity event”.

Gradwell argues that this sudden injection of liquidity – the amount of bitcoin available for trading rose by close to 60 per cent over that period – has been a “fundamental driver” behind the recent price decline. At the same time, bitcoin trading volumes have now fallen in tandem with the prices, from close to $4 billion daily in December to $1 billion today.

*Bitcoin wallets*
Overall, some 1,600 bitcoin wallets – managed by both speculators and investors – contained at least 1,000 bitcoin each in April, according to Chainalysis, collectively holding nearly 5 million bitcoin, or close to a third of the available total.

Of those, just under 100 wallets owned by longer-term investors contained between 10,000 and 100,000 bitcoin – so between $75 million and $750 million at today’s prices.

“This concentration of wealth means that bitcoin is at risk of volatility, as the moves of a small number of people will have a large effect,” says Chainalysis’ Gradwell.


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## ant dee (9 Jun 2018)

Some of those fat wallets are just exchanges' cold wallet addresses.


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## tecate (9 Jun 2018)

Seems like a fairly accurate piece.  As regards whales and market manipulation, crypto's don't have exclusivity on that - George Soros can attest to that.  However, they have a vulnerability as their market caps are small (comparatively).
Other than that, it's just an extension of the unequal distribution of wealth we see in all asset classes.  The interesting thing though is that this is the first time ever we have seen retail 'investors' get the first bite on a financial offering like this ahead of the institutions.  We have not seen any institutional money enter the space yet.  The speculation is that it's coming - we'll have to see whether that actually plays out or not.


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## Brendan Burgess (13 Jun 2018)

*'Whale' warning: 0.01% of accounts own 35% of Bitcoins*

A thousand bitcoin holders, out of a total 11 million, hold 35.4% of currency, according to BitInfoCharts.

...

They can "dictate monetary policy, which is normally the function of a central bank or a government", he said.

...
In a 24-hour period between Monday and Tuesday, the 100 biggest bitcoin transactions out of 200,000 accounted for 24% of the money volumes, an unimaginable level of concentration compared to other markets.

"In the currency market for example it's such a huge market with so many transactions in a day that a pure actor can't have any influence on a market," Craig Erlam, an analyst for Oanda, a currency trading platform, told AFP.

...
But Aaron Brown, former director of AQR Capital Management, who runs a bitcoin fund, said the role of "whales" is being exaggerated.

He admitted that a coordinated sale of bitcoin by the biggest accounts could cause the value of the currency to plunge but said that the risk was theoretical and that major historical investors in the currency have a strong sense of community.


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## ant dee (13 Jun 2018)

https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html

Key distinction here is *addresses*, which is not the same as bitcoin holders.
A bitcoin holder likely has many addresses, so it could be 10 people owning all these addresses.

But the most important thing is bitcoin exchanges cold wallets. In fact the top 5 are even labeled as such, and about 5 more in the top 100.
An exchange isn't obligated to label its address, nor will it use only one, so i expect many more of those to be cold storage for other exchanges.
Bitfinex had 1.6 mil users at the end of last year (https://www.reddit.com/r/bitfinex/comments/7l3aag/bitfinex_has_16_million_users/), 
even though its bad practice many of those will hold some bitcoin on the exchange.

So how can we say if the top address on the richlist holds a single holder's bitcoin or 1m user's bitcoin?

And those big transfers, could be small-medium exchanges spreading their funds around the big ones so they dont get hacked into bankruptcy.
Or, more likely, funding some bots on other markets to offer increased liquidity on their own.


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