The current Bitcoin wave has ushered in millionaires as the asset continues to attract more investors despite experiencing a minor correction.
Data acquired by Finbold indicates that by February 22, 2021, addresses with a Bitcoin balance of over $1 million stands at 109,952. About 9,200 of the addresses each have a balance of about $10 million. The remaining 100,752 addresses have a balance amounting to $1 million each.
Elsewhere, addresses with Bitcoin worth $100,000 stand at 480,956, while about 2.2 million wallets hold Bitcoin with a value of $10,000. Another 6.5 million addresses each contain a balance worth $1,000. The largest group of addresses have a Bitcoin balance of $100 at 15.08 million.
Due to the anonymous nature of the world’s leading digital asset, it is impossible to single out the owners of the addresses. However, the chances are high that the addresses with over $1 million in Bitcoin belong to investors with large capital streams like institutions or very early adopters. Worth mentioning is that one Bitcoin holder can have several addresses.
More institutions have been amassing the digital asset, with the current rally contributing to its new all-time high. On February 21, 2021, the token hit an all-time high above $58,000, having attained a market capitalization of $1 trillion.
However, by press time, the value of Bitcoin had dropped by about 6.6% to trade at $54,431, according to data provided by CoinMarketCap. Still, the asset records whopping year-to-date gains of 85.3%.
The current record price rally was triggered after electric vehicle manufacturer Tesla (NASDAQ: TSLA) announced its $1.5 billion Bitcoin investment. Tesla joined other institutions like MicroStrategy that have massively converted cash reserves into Bitcoin.
Effects of few large holders on Bitcoin market
As the data indicates, only a few Bitcoin addresses hold the highest value of Bitcoin. This scenario has led to a debate on wealth concentration, especially when the assets sit unmoved in an account for years.
In return, the liquidity is lowered while the price volatility increases. Furthermore, the volatility increases when these large holders move a significant amount of Bitcoin in a single transaction.
In normal circumstances, large Bitcoin address holders do not buy Bitcoin during rallies like retail investors. In the long run, large Bitcoin addresses aim to drive the market and shake out retail investors in panic and capitalize on opportunities to buy relatively cheaply.
It can be assumed that those wallets holding around $100 are mostly retail investors who purchase the asset over the fear of missing out or to try cryptocurrency trading as well get to know the blockchain environment itself better.
However, the Bitcoin value held by wallets will largely depend on the asset’s price movement.