Retail Holders Dominate Bitcoin Supply as Shrimps and Crabs Absorb More Coins Than Mined in 2022

Bitcoin continues to be a hot topic in the world of finance, with its supply distribution being closely monitored by experts and critics alike. According to a recent report by Glassnode, BTC ownership is being dispersed over time, and is much less concentrated than previously reported. The report provides an update on the growth and contraction of supply held by defined entity cohorts, and provides remarks on the distribution of the circulating supply as it stands today.

The report states that an increasingly large proportion of supply is held by smaller entities, such as Shrimps (< 1BTC) and Crabs (< 10 BTC), which have absorbed a remarkable 2.25x more coins than were mined in 2022.

Institutional adoption post March 2020 is visible on-chain across several wallet cohorts, with balances showing signs of being increasingly market-driven (i.e. swelling/contracting with price). Entities with a balance between 10 and 1k BTC are absorbing coin volumes equivalent to 100% of issued coins in 2022.

The report also indicates that exchange reserves continue to deplete in aggregate, especially following the collapse of FTX. This is a combination of both renewed demand for self-custody, but also the expansion of institutional and collaborative custody solutions, and exchange-traded products like GBTC.

To better understand the distribution of BTC ownership, Glassnode divided network entities according to their Bitcoin holdings. The cohorts include Shrimps (<1 BTC), Crab (1-10 BTC), Octopus (10-50 BTC), Fish (50-100 BTC), Dolphin (100-500 BTC), Shark (500-1,000 BTC), Whale (1,000-5,000 BTC), Humpback (>5,000 BTC), Exchanges and Miners.

The report provides a summary of the state of the relative ownership of the Bitcoin supply approximately two years after the original article was published. The data shows that the smallest entities (Shrimps to Octopus) saw relative growth, while Whales, Miners, and Exchanges experienced the largest contractions in supply share.

In addition to assessing the change experienced by each cohort since February 2021, the report explores changes in the relative distribution of supply by way of a new metric, the Yearly Absorption Rate. This tool provides a relative measure of balance change relative to the volume of newly minted coins over the last year, providing insight into the level of expansion/contraction a cohort has experienced relative to new supply entering the market.

Overall, the report provides an in-depth analysis of BTC supply distribution and how it has changed over time. It highlights the increasing dispersal of BTC ownership, particularly among smaller entities, and the impact of institutional adoption and custody solutions on the distribution of BTC supply. The report serves as a valuable resource for those seeking to better understand the dynamics of BTC ownership and supply distribution.

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