Bitcoin Wealth Distribution Improving as Whale Power Dwindles Per New Flipside Crypto Research

According to the latest research by Flipside Crypto, a platform backed by Digital Currency Group and Coinbase among others that measure the value of crypto assets based on underlying fundamentals, the Bitcoin Whale power has declined since 2017.

Recently, Eric Stone in an interview with LongHash talked about the surge in activity among the Bitcoin wallets that has been lying dormant for a long time in the last quarter of 2018. This has resulted in a weakness in the power of Bitcoin whales.

Summarizing the key findings of Flipside Crypto’s research about the long-dormant Bitcoin accounts, the bitcoin wealth distribution is continuously improving as 99 percent of all the Bitcoin supply that has owned by 6.7 percent of Bitcoin wallets in November 2017 right before the $20,000 peak has expanded to 8.5 percent of non-empty Bitcoin wallets.

This is the highest number, Stone says that they have seen which is surpassing the previous high of 8.56 percent in January 2016.

“This is a sign that dispersion of Bitcoin wealth is gradually improving, though again we have seen this number moving gradually upward over the course of the last year or so, rather than dramatically rising.”

Pointing out the data, he states, 16.4 percent of bitcoin supply has been unmoved for more than two and a half years while 15.6 percent of BTC supply hasn’t moved between the period of six months and two and a half years.

Meanwhile, 45.8 percent has moved in the last one to six months and 8.9 percent has moved between the period of last one week and one month.

“These numbers are generally reflective of the pattern we’ve seen since the major shift out of frozen storage in October 2018 and subsequent activity in November.”

Market Manipulation

Stone also dived into the topic of market manipulation of Bitcoin from institutional investors which he says is an “interesting theory” but seems “extreme” that legitimate financial institutions would try this tactic when they themselves are “looking to shed this asset class of its reputation for being easily manipulated.”

He further shares the concentration of Bitcoin supply over time at different levels of ownership, more wallets share the control of 99 percent and 95 percent and the same very small number of largest wallets control 80 percent of Bitcoin supply.

Bitcoin whales do manipulate the market and people follow them resulting in price drop but it’s on a micro level, said Stone. Over the course of Bitcoin frenzy at 2017 end, the most dramatic uptick in Bitcoin wealth dispersion happened while during 2018, it remained either flat or up.

As for the spike in October and November 2018 among long-dormant Bitcoin accounts, two specific wallets were responsible for this shift. It involves a cold storage Binance wallet that moved several hundred million dollars worth of Bitcoin out of which some sold while some didn't.

“We know that social media drives the price of Bitcoin,” said Stone and that’s why when one whale moved this much amount of funds, investor and traders keep a watch and spread the information that leads to a decline in Bitcoin price.


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