Creative Translation: The Grayscale Report: Bitcoin's "Sticky Supply" Dynamics Could Amplify the Impact of Macro Events on Prices

Digital asset management company Grayscale Investments released a research report on Thursday (30th) that explores the ownership distribution of Bitcoin (BTC) and delves into the “stickiness” of Bitcoin supply, analyzing why the company considers this indicator particularly important at present and its potential impact on the future of Bitcoin.

Bitcoin ownership is widely distributed

Grayscale’s report points out that the distribution of Bitcoin ownership is more widespread than people usually think, with the majority of Bitcoin holders being small retail investors scattered around the world. Statistical data shows that 74% of addresses hold less than 0.01 Bitcoin (valued at approximately $350 based on the November 6th price in the report), and only 2.3% of Bitcoin holders own 1 Bitcoin or more.

While a considerable portion of Bitcoin is also held by large entities, Grayscale notes that “the majority of Bitcoin’s largest holders represent ‘many people’ rather than a few”, such as cryptocurrency exchanges representing millions of users and government institutions.

Grayscale emphasizes the situation of other major holders in the report, with about 40% of Bitcoin supply concentrated in trading platforms, mining companies ensuring network security, government agencies, listed companies and exchange-traded funds (ETFs), as well as dormant addresses that have been inactive for more than ten years (long-term holders).

“Dynamics of sticky supply” will increasingly impact Bitcoin price reactions

Grayscale’s research indicates that some groups of Bitcoin holders seem to represent “sticky supply” that resists selling during price fluctuations. For example, researchers emphasize that Bitcoin supply that has been inactive for up to ten years recently reached a historic high, while balances of miners and exchanges remained stable during Bitcoin’s volatility.

Grayscale points out that this lack of flexibility may amplify the impact of external events that drive new demand on prices in the short term, such as the potential approval of a Bitcoin spot ETF in the United States or the Bitcoin halving in 2024. Grayscale states:

The report predicts that with the increase of illiquid supply and the decrease of short-term supply, ownership dynamics will increasingly impact Bitcoin price reactions. Grayscale’s analysis highlights how the widespread distribution of Bitcoin among individual and institutional investors represents its increasing mainstream acceptance and evolution. At the same time, limited supply may strengthen positive market forces.

The report concludes:

Data source

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