Bitcoin Whale Dominance Recording its Largest Sustained Increase in a Decade
Bitcoin price is not showing much movement, but it looks like whales are taking this opportunity to stack some sats. Bitcoin’s whale population has been decreasing since 2016 is now growing once again.
Bitcoin whales are entities with a balance of at least 1000 BTC, and they have been rising almost continuously since January 2020. Their numbers have increased to above 1800 and “is possibly on the path to overtake previous highs,” noted Glassnode.
But while whales are gaining an increasing share of BTC, individual whales are not getting richer.
Over the past five years, the number of BTC held by whales has been decreasing steadily, declining more than 22% from 6.7 million to 5.2 million BTC. But once again, it has begun to incline as more entities pass the threshold of becoming a whale.
The BTC balance held by whales peaked in early 2016 and decreased consistently, and although in 2020 whale holdings are on the increase, the BTC balance held by them is still well below the peak.
When it comes to bitcoin whales’ dominance, accounting that total bitcoin supply has been growing, it peaked in 2011 and has been in a near-constant decline since.
“This means that the recent incline in whale dominance, while seemingly small on the scale of bitcoin's existence, is still the largest sustained increase in almost a decade.”
As such, whales now have a smaller share of the “bitcoin pie” than they did in the past. Despite the ongoing increase in whales’ numbers, as a group, they aren’t rich in USD terms — the highest US wealth reached the peak of the market in late 2017.
But the growing number may see them overtake the level reached in June 2019 and to reach a new ATH, but the market needs to see an increase.
Interestingly, as a group, whales are beginning to accrue more wealth, but “individual whales are growing slightly poorer.”
The average BTC wealth of each whale has been in decline since 2011 and hasn't increased meaningfully in 2020 either. This means these whales are more like “belugas” rather than “blue whales.”
“The recent increase in whales' BTC balance is due to the increasing number of whales, not due to individual whales getting richer.”
But at the same time, Glassnode found, much of this recent increase in the number of whales is not new money instead of existing wealthy entities withdrawing their BTC from exchanges.
The total BTC balance of crypto exchanges has also decreased significantly throughout 2020, specifically after Black Thursday. These withdrawals are the reason, to a large degree, many new whales appear on-chain in such a short amount of time. It is possible,
“whales may have used Black Thursday as an opportunity to get in at the bottom and then withdraw their bitcoin to HODL for the longer term in anticipation of the next bull run.”
This decline in exchange BTC balance coincides with the increase in the number of bitcoin whales and correlates with the rise in whales’ balance.
While whale dominance has begun to increase in 2020, exchange dominance has decreased, meaning “their combined value has not experienced any significant change.”