- Bitcoin’s distribution can be analyzed through the transparent nature of the blockchain
- Nearly 1 million addresses now have more than 1 bitcoin, which is equivalent to $27,500, or half the average US annual salary
- Since the bitcoin price plunged last year, falling 77% from peak to trough, the 1 bitcoin barrier has become much easier to reach.
The fun thing about blockchain is that while it is impossible to know the identity of the individuals or institutions behind a bitcoin address, the distribution of assets is readily available on the internet for all to see.
This means that we can study the distribution of coins throughout the network. For example, the largest holder of bitcoin is the anonymous creator, Satoshi Nakamoto, who holds about 1 million coins, or more than 5% of the entire supply.
However, digging deeper, we can estimate how many people have a certain amount of bitcoin. Specifically, a target is about to be hit: there will soon be 1 million addresses holding 1 bitcoin or more.
The current number, as of May 8, 2023, is 997,919 addresses that hold 1 bitcoin or more, which is equivalent to $27,500. With an average US salary of $56,400 per year, 1 bitcoin is thus equivalent to almost half that – and much more – in most other countries.
To be clear, one bitcoin address does not equal one person, so it does not mean that 1 million people own 1 bitcoin. Some individuals are in control of multiple bitcoin addresses, while some addresses may belong to institutions or groups of people. But this is the best approximation we have, as we said above, it is impossible to know the identity behind these addresses. We only have one alphanumeric code on the blockchain, that’s the beauty of it.
One million addresses represents just over 2% of the total number of non-null addresses on the bitcoin network.
“For a long time, a bitcoin was only a small amount. It was only ten years ago that it crossed the $100 mark for the first time. Then in 2017, it crossed $10,000 for the first time. It is remarkable to sit here with almost one million addresses holding less than one bitcoin. Max Coupland, director of CoinJournal, said.
How does the distribution change as the price of bitcoin increases?
Obviously, the price of bitcoin is incredibly volatile. Back in November 2021, the price of bitcoin was around $69,000, which is clearly higher than the average salary in the US. Since then, property prices have fallen. Despite rising 66% so far this year, it is 60% away from its peak.
Therefore, it has made it more possible to obtain certain amounts of bitcoin. In plotting the pattern of bitcoin addresses holding more than 1 bitcoin against bitcoin price, there is a clear change in trajectory from the spring of 2022, when the bitcoin price began its downward trend. This was followed by a period of leveling off during COVID as the bitcoin price went parabolic, rising from $7,000 in early 2020 to nearly 10X by late 2021.
When comparing the growth in addresses holding 1 bitcoin to the total (non-zero) addresses on the network in the next chart, one can see that non-zero addresses have increased at a much more steady pace, with the number of addresses in early 2022 increasing. 1 bitcoin or more was not matched with the pickup. This makes intuitive sense, since the world is on a dollar standard, and requiring fewer dollars to buy 1 bitcoin means more people can hit that barrier.
Despite the handicap of holding more than 1 bitcoin has become easier to achieve, it is still a Very of money. If bitcoin ever regains the levels it did during its post-pandemic boom, the trajectory of those reaching this elusive “perfect coiner” status will again slow down, as it will likely not. Of course, bitcoin’s price could always go in the opposite direction, in which case it wouldn’t be such a difficult – or desirable – target.
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