The number of bitcoin wallets holding at least $1 million in BTC is on the rise. This means the number of Bitcoin whales is increasing gradually.
Data from cryptocurrency analyst firm Glassnode shows that there are over 13,000 Bitcoin wallets that are worth over $1,000,000. The increase has not broken a particular high. However, it stands out as the most significant achievement in the cryptosphere this year. The interpretation of this is that perhaps holders of the crypto are cashing out their BTC to avoid high volatility. On the other hand, could be traders cashing out to predict market movement and sell at higher rates.
BTC Could Become Scarcer
According to the report, there are indications that more individual and institutional investors are looking into bitcoin. This only means that BTC could become scarcer following the recent halving event. A large amount of bitcoin moving from the investment bucket into the trading bucket can become a significant liquidity source. This is only likely to happen if the price rises to a level where investors will be willing to sell.
During their BTC market report for June crypto analytic firm Chainalysis wrote:
“As of June 2020, roughly 18.6 million Bitcoins have been mined. We break that 18.6 million Bitcoin down into three buckets based on its movements to date […] roughly 60% of that Bitcoin is held by entities — either people or businesses — that have never sold more than 25% of Bitcoin they’ve ever received, and have often held on to that Bitcoin for many years, which we label as Bitcoin held for long-term investment.”
Stayed Dormant For a While
You need at least 110 Bitcoins to make the equivalent of $1 million and become part of the 13,000 wallet owners. This makes up a large part of the Bitcoin market among the most significant bitcoin wallet addresses. The group was most extensive in 2018, during which the numbers soared up to 26,000 during Q1 2018. This was when the price of Bitcoin was at the $17,000 peak.
Soon after that, prices started falling significantly. According to the Glassnode chart, they fell to below 12,000 by May of the same year. The number dropped to below 6,000 at the beginning of 2019 and stayed dormant for a while. The move to exceed 13,000 is an indication that institutional investors are trooping back into the market.
Whales Hold less BTC Now
At the time of writing, Bitcoin is trading at around $9,241. Investors and traders could be buying at this support level. Glassnode recently wrote in their weekly report:
“The price of BTC is now more than 20x higher than it was when we first saw this many whales, implying that more wealth is being held by whales […] however, the average balance held by each whale has decreased during this period, such that whales hold less BTC now than in 2016, and less wealth (in USD terms) than in 2017.”
