A Handful Of Investors Control a Third Of All The World’s Bitcoins

The demand for cryptocurrencies continues to grow, fueled by people who continue to invest in them or begin to enter this world. But those who really reign in this sector are not the ‘new investors’, but the so-called ‘whales’.

The demand for cryptocurrencies continues to grow, fueled by people who continue to invest in them or begin to enter this world. But those who really reign in this sector are not the ‘new investors’, but the so-called ‘whales’.

Currently, there are 10,000 users who control more than a third of all available bitcoins , reports the National Bureau of Economic Research (NBER). These ‘whales’ concentrate too much power and in fact have the ability to influence the value of this and other cryptocurrencies. But even more worrying is the fact that the research data does not show whether these handful of accounts belong to independent companies or individuals or, worse still, whether the same investor has more than one – or hundreds -, which is quite likely. according to the experts of the sector, making therefore that the concentration of these ‘whales’ can be greater.

In fact, those responsible for the study affirm that they cannot rule out that “some of the most important addresses are not controlled by the same entity . ” That is, as we said,  several addresses can belong to the same person or company .

The information, which appeared for the first time in the US media Bloomberg , hints at the opacity that this investment network actually has. “It can be especially difficult to determine the concentration of ownership, as many of the larger addresses do not usually represent people, but exchanges and other entities that own bitcoin on behalf of other investors, ” the article says.

Using a data collection method that differentiated between addresses belonging to intermediaries and individuals, NBER researchers were able to find that the former controlled around 5.5 million bitcoins at the end of last year, while the latter controlled around 8. , 5 million. In addition, the top 1,000 individual investors controlled about 3 million . All this data reinforces the idea that the ‘concentration of power’ on this cryptocurrency could be even greater than what can be seen.

In addition, to this problem is added another equally serious:  0.1% of the most important miners in the world have the capacity to control 50% of bitcoin mining , which means that the network could present vulnerabilities in the should the cryptocurrency fall sharply. It also presents risks if a group of collusive miners or a miner decides to take control of most of the network.

The latest prediction on BTC ensures that its price will rise to $ 100,000 this year.

All of this presents threats to those small investors who put their full trust in bitcoin to take it as a large store of value . “Our results suggest that despite the significant attention that bitcoin has received in recent years, the bitcoin ecosystem is still dominated by large and concentrated players, whether they are large miners, bitcoin holders or exchanges,” the researchers wrote. “This inherent concentration makes bitcoin susceptible to systemic risk and also implies that the majority of the gains from increased adoption are likely to fall disproportionately on a small group of participants.”

The uptrend of bitcoin

In recent times, bitcoin has resumed its upward trend and has risen above 2% this weekend, despite the fact that it is precisely during Saturdays and Sundays when the queen of cryptocurrencies usually makes corrections. At the time of writing this news, the virtual currency is at $ 65,879.50 .

Evolution of bitcoin in recent years.
Evolution of bitcoin in recent years.

Thus, the month of November began in the same way that October ended: on the rise . Bitcoin climbed on the monthly chart and the weekly chart looks positive, suggesting that November could also be a bullish month. Bitcoin closed last month with a 40% appreciation, one of its best months since December 2020.

John R. Zepeda

I have extensive experience working as a content writer in the areas of cryptocurrencies and finance, where I create interesting pieces that both inform and engage their audiences.

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