Small Investors are Flooding into Bitcoin as Whales Start Losing Market Dominance


The composition of Bitcoin’s investor base is rapidly shifting, with smaller investors garnering greater dominance over the total circulating BTC supply.

This comes as the dominance of so-called crypto whales sees a sharp decline, signaling that the market is currently seeing inflows of smaller retail investors.

This shift comes as more investors start turning to the benchmark cryptocurrency due to its status as a “hard asset” – which many be sparking a trend of accumulation amongst investors.

One group, in particular, that might be behind this trend is young investors. A recent analysis from banking giant JPMorgan shows that this group is widely accepting Bitcoin as both a store of value and as an alternative to the U.S. Dollar.

Bitcoin Whales Cede Dominance Over the Market as Retail Investors Accumulate

Data shows that small investors – defined as those holding less than ten Bitcoin – are rapidly gaining control over the benchmark crypto’s circulating supply.

This trend was highlighted in a recent post from analytics firm Glassnode, in which they explain that over the past five years, the percentage of the BTC supply owned by entities with less than ten BTC has grown by nearly 9%.

They also note that the percentage of the supply owned by entities holding between 100 and 100,000 BTC has declined from roughly 63% to 49.9% currently.

“Control of Bitcoin’s supply has been steadily shifting towards smaller entities. The % of supply owned by entities holding ≤ 10 BTC grew from 5.1% to 13.8% in 5 years, while the percent held by entities with 100-100k BTC declined from 62.9% to 49.8%.”


Image Courtesy of Glassnode.

What Might Be Causing This Trend to Take Place? 

One group potentially responsible for this trend is young investors, who appear to be accumulating Bitcoin at a rapid pace.

NewsBTC reported yesterday that a recent analysis put forth by JPMorgan revealed that the younger generations have a high inclination to invest in Bitcoin.

“The two cohorts show divergence in their preference for ‘alternative’ currencies… The older cohorts prefer gold while the younger cohorts prefer bitcoin,” the bank’s analysts wrote.

Because Bitcoin is currently performing incredibly well against a backdrop of immense money printing and economic turbulence, there’s a high chance that this trend will only pick up steam as demand for “hard assets” continues growing.

It may also perpetuate the sliding dominance that large entities wield over Bitcoin’s circulating supply – which further decentralizes its distribution.

Featured image from Unsplash.

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