Bitcoin proved to be one of the fastest-growing assets in the 21st century. It went from an odd digital currency with no value to a notorious revolutionary financial instrument that hit nearly $70,000 at its peak in 2021.
Bitcoin’s deflationary nature is well-known. The initial BTC supply was limited to 21 million. Now, this amount is even lower as roughly 20% of all Bitcoins have allegedly stuck in the wallets forever. Another known fact is that a vast amount of BTC is held by so-called Bitcoin whales. Whales are the owners of huge amounts of Bitcoins. Each one can have hundreds or even thousands of BTC. Huge transactions of BTC whales impact the BTC price significantly.
As the Bitcoin network is transparent, Bitcoin scholars have listed all the whales’ wallets. Some of these addresses belong to individuals, while others are held by companies. From this article, you will learn how Bitcoin gains its value, who has the most Bitcoin in the world, and how their actions can impact the BTC price.
What Gives Bitcoin Its Value?
Although Bitcoin increasingly becomes subject to governmental regulations, its value still depends on supply and demand. Some people believe Bitcoin is worth something and want to buy it, while others are eager to sell it, whatever the reason. As long as buyers outweigh sellers, Bitcoin preserves its value.
It’s understood that supply and demand don’t exist in a vacuum. Supply and demand depend on many factors, some of which lay far beyond the intuition of an average person without deep knowledge of the crypto market. Past price trends influence future prices. Events in the world economy, politics, law-making, etc., also shape the BTC price’s future trajectory.
Why do people believe they should buy Bitcoin? There can be many answers to this question, and each one answers why Bitcoin has value. Many people think they can earn through holding Bitcoin because they see that this asset keeps increasing in the long run. These people want to multiply what they have, so they invest in Bitcoin. Others need Bitcoin to participate in cryptocurrency day trading. Traders have increased demand for Bitcoin as it is the most wanted cryptocurrency on any market. Another reason why people might want to buy BTC is that they need a quick cross-border means of payment. Or they want to dip their toes in the cryptocurrency sector and buy the most popular asset for starters.
Companies buy Bitcoins and start to accept them as a means of payment for their service for similar reasons. They see that Bitcoin is in demand, so they make it easier for Bitcoin owners to use this currency. It attracts new audiences to the companies and generally draws more attention because cryptocurrencies are still a hot topic these days.
Scarcity is among the most crucial factors that drive the BTC price. Bitcoin is a deflationary asset. The new coins are mined slower and slower, while some coins leave circulation for a number of reasons. The block reward size plays an important role here. Miners who validate Bitcoin transactions don’t do it out of pure altruism; they receive mining rewards. The mining itself is associated with huge expenses. Miners should be able to sell what they mine at reasonable prices to cover the costs and gain some profit. They will go bankrupt if they fail to sell what they mine for a significant price. The Bitcoin network is programmed so that block rewards decrease by two once every four years.
This event is called halving. It helps Bitcoin to maintain scarcity. Fewer new Bitcoins reach the market every four years. At the same time, miners understand that after the next halving, they will get only 50% of the reward for doing the same work at the exact costs. It pushes them to increase prices. Throughout Bitcoin’s history, halving events were instrumental in boosting the BTC price. That’s how the Bitcoin network’s inherent mechanism helps propel Bitcoin’s value constantly.
Why Does Crypto Whales Matter?
Whales own over 30% of all Bitcoins. These coins are held in wallets that have been inactive since 2012 or so. The importance of crypto whales can’t be overestimated. The essential factors that impact the prices of stock markets are relevant for crypto markets, as well. One of these factors is an instantaneous buy/sell of a major amount of one asset. As in the cryptocurrency sector, people instantly learn about such transactions; they see someone getting rid of a considerable amount of certain crypto in one minute. This news triggers other investors to sell this asset, and the price drops significantly.
The opposite situation is when a well-known entity buys a large amount of a particular asset. People see that a respected company or a celebrity invests money in this or that token and want to do the same. The demand for the asset surges, and the price goes up. For instance, in 2021, the news of Tesla Inc. buying $1.5 million in BTC was a factor in the BTC price growth. That’s why the transactions made by whales significantly impact the market, disregarding whether whales sell or buy. Personal decisions of people buying or selling much BTC can shake the entire market.
Who Owns the Most Bitcoin?
Before answering who owns the most Bitcoin, let’s point out some basic facts about the BTC amount. As of November 2022, there are over 19m coins in circulation. The current market cap exceeds $300 billion. However, it’s worth noting that the conventional market cap estimation is inaccurate as the formula used is all the mined coins multiplied by the current market cap. It ignores that about 20% of all BTC coins are probably lost forever. More than that, we don’t know how large the share of wash trading is in Bitcoin trading. We just warn you about these discrepancies, but we won’t use alternative estimations in our article, although they might have been more accurate.
The same person can have any number of BTC addresses. It estimates the wealthiest Bitcoin owner hard. Allegedly, five addresses with the most Bitcoins hold over 700,000 BTC. The biggest amount on one address is 80,000 to 94,000 BTC by different accounts. The holder is unidentified. Satoshi Nakamoto, a mysterious creator of Bitcoin, is considered the person with the most BTC. Allegedly, 22 of his wallet addresses store over 1.1m Bitcoins. It effectively makes him a multi-billionaire. For some reason, the coins mined by Nakamoto in the early years of Bitcoin are still held quietly in the wallet.
Most of the top BTC holders are yet to be identified. If we speak about the identified people with the most Bitcoins, the top position is held by the Winklevoss brothers. Tim Draper is one of the people with the most significant amount of BTC. The companies with the most Bitcoins are Binance, Bitfinex, and OKEX.
How Many Bitcoins Do You Need to Be a Billionaire?
As of November 15, 2022, one needs to own over 61,300 BTC to become a USD billionaire. Considering Bitcoin’s volatility, this amount can vary significantly from time to time.
What Does It Mean for Institutions to Own So Much Bitcoin?
Reportedly, institutions own 6.47% of all Bitcoin. One of the reasons why institutions invest in BTC is to protect their funds from the inflation effects. It’s understood that investing a lot of money in BTC is a considerable risk. The Tesla Inc. team, for instance, had to re-think their decision to buy and accept Bitcoin several months after the investment was made. Another reason is that investing in BTC attracts new customers and for publicity’s sake.
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