On-chain data reveals that Bitcoin holders with smaller amounts of BTC took advantage of the lengthy period Bitcoin stayed under $24,000 to increase their positions. Over 1 million addresses now hold more than 1 BTC, with much of the accumulation taking place between 2021 and 2023.
The Rise of BTC Shrimps
As per on-chain data provided by LookIntoBitcoin, the number of Bitcoin addresses holding over 1 BTC totaled 991,670 as of March 29, and has increased consistently since Bitcoin’s inception. The figure increased significantly following crypto exchange FTX’s downfall in November 2021, from 915,110 on November 8th to 961,756 on December 8th. The decline in Bitcoin’s price to $15,500 for the first time since 2020 likely offered committed HODLers a better chance to stack sats.
Hardware wallet manufacturers witnessed record sales in individual crypto wallets following FTX’s bankruptcy, implying a broader shift towards individual wallets over centralized exchange wallets. This could also explain the growth in smaller address balances since exchanges often aggregate BTC from thousands of users into one blockchain address at a time. In addition, blockchain intelligence firm, Glassnode noted at the time that “shrimps” – blockchain addresses with less than 1 BTC – added a record 96.2k BTC to their collective holdings the month after FTX’s failure.
Bitcoin’s Supply Distribution
Over the long term, the number of wallets holding more than 0.1 BTC (4,289,243) and more than 0.01 BTC (11,724,266) have also continued to increase. Meanwhile, the number of addresses holding more than 10 BTC or more than 100 BTC has remained relatively stable since at least 2018, while wallets with more than 1000 BTC have fallen approximately 20% since 2021.
Data from CoinMarketCap indicates that only about 11% of Bitcoin’s supply is held by entities with more than 0.1% of all holdings. Compared to certain altcoins like Ethereum or Cardano, whose figures are 39% and 33% respectively, Bitcoin has a relatively small amount of wealth concentration.
CoinMetrics analyst Nate Madrey suggested in 2021 that Bitcoin’s more even distribution could be due to its Proof of Work consensus mechanism, which incentivizes miners to sell newly minted coins onto the market rather than hold onto them.