The number of Bitcoin whales, defined as wallets holding 1,000 BTC or more, has been steadily decreasing, according to on-chain analytics provider Glassnode. This development is seen as a positive trend for the cryptocurrency ecosystem, as it promotes decentralization and reduces the risk of market manipulation by large holders.
Glassnode’s data reveals that there was a record high of 2,169 Bitcoin whales just before the 2021 bull market. However, the current figure stands at 1,672, representing a 23% decline or a decrease of 497 whales. The decline began in the first half of 2021, following a plateau until May 2022, and continued after a significant sell-off caused by the Terra/Luna ecosystem collapse.
Even with recent price gains, the number of Bitcoin whales is at its lowest level in over three years. This indicates a shift in asset distribution, with a greater proportion of Bitcoin being held in smaller wallets.
Examining the distribution of Bitcoin wealth, the majority of the richest BTC wallets are exchange addresses, with Binance holding the top position with 248,597 BTC, valued at approximately $7.5 billion. While the number of addresses holding less than one coin has increased, the majority of BTC is still concentrated in a limited number of accounts.
Glassnode’s “week on chain” report also provides insights into the active and available supply of BTC. It reveals that only 11.9% of the circulating supply (equivalent to 2.28 million BTC) is held in exchange balances. Additionally, around 13.6% (2.65 million BTC) is held by short-term holders, while the majority, approximately 74.5% (14.4 million BTC), is being held or is otherwise unavailable.
At present, Bitcoin prices are consolidating around the $30,000 resistance level, having reached this zone for the second time this year. Despite facing resistance, Bitcoin has experienced a modest 0.5% gain, trading at $30,437 at the time of writing. Increased inflows to exchanges have been observed, which could potentially lead to profit-taking. If Bitcoin continues to face constraints at current levels, there is a higher likelihood of a pullback to find support.
Overall, the declining number of Bitcoin whales signifies a positive shift in asset distribution, contributing to a more decentralized cryptocurrency landscape and mitigating the risks associated with market manipulation by large holders.
