Intermediaries Now Hold Over 15% of All Bitcoin Holdings, Other 80%+ is Self-Stored, Lost or Hacked
Even though the limited supply of bitcoins has an impact on its value, so does the deflationary attributed. Right now, control by intermediaries is about 16% of the BTC supply and we’re only ten years into the life of crypto. It is expected that the control percentage will increase over time due to banks, businesses, and others who are interested in gaining control of the crypto market.
at least 16.6% of bitcoin is held by intermediaries, and with all the institutions, banks, and apps that are coming, that number will only go up.
— Meltem Demirors (@Melt_Dem) March 7, 2019
The big question is what the impact the bitcoin supply will have on its price and whether it is in contrast to bitcoin’s purpose.
Generally, supply and demand control everything’s value. The higher the demand for something, the higher its price will be. Inversely, the lower the demand, the lower in price. Essentially, this is how those on eBay are able to increase the price of products that just launched – with so little supply, and high demand, they can charge a premium for the product. The same seems to apply to bitcoin.
The current bear market has caused wane in demand, and thus, its price decreases. This is also the case as supply increases due to mining. The next question is what occurs when intermediaries, like banks, start to collect the supply of BTC and what will it do to bitcoin’s price in the future?
Meltem Dimiorors of CoinShares, recently pointed out on Twitter that about 16% of the BTC supply is controlled by intermediaries, like Abra and Binance. Like other exchanges, like Bakkt, Digital Assets, and Fidelity launch, they’ll do the same and the percentage controlled with an increase.
There seems to be a benefit to this though, which is that as supply and demand shift, so will its price. As these institutions collect the supply of BTC and demand increases, so will the price. The hope is that these developments are near.