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Whale Watching: Who Are the Largest Holders of Bitcoin?

Whale Watching: Who Are the Largest Holders of Bitcoin?

Explore our in-depth analysis of the largest holders of Bitcoin in 2023 and the trends that will shape Bitcoin whale activity in 2024.

In October 2008, Satoshi Nakamoto (or someone using that name as a pseudonym) published the now-famous whitepaper “Bitcoin: A Peer-to-Peer Electronic Cash System,” laying the foundation for a revolutionary digital currency. Bitcoin, a currency that didn’t exist before 2008, has a current market cap of about $800 B (as of 12/12/23). Since late 2017, Bitcoin’s (BTC) value has famously fluctuated over the last 15 years.

Bitcoin Market Cap 2011- 2023

Bitcoin Market Cap 2011- 2023
Source: CoinMarketCap, 12/13/23

Blockchain, the decentralized ledger system Satoshi invented for recording Bitcoin transactions, provides a transparent way to verify and track peer-to-peer transactions. In theory, blockchain should simplify tracking who owns the most Bitcoin. In reality, it’s challenging to precisely identify the largest holders of Bitcoin, known as “whales” in crypto circles.

Satoshi’s true identity remains a mystery; we don’t even know if Satoshi is one person or a group of people. All we know is that Bitcoin’s goal is to simplify finance and create a more equitable system.

Some crypto watchers claim the opposite is happening. They criticize the Bitcoin sector for a high concentration of BTC wealth in just a few wallets. Glassnode makes a data-driven case that those claims are exaggerated and says BTC distribution is expanding among more owners over time.

With deep-pocketed TradFi institutions ramping up their interest in crypto, will we see more concentration of BTC ownership in 2024, especially with the upcoming BTC halving in April?

Let’s take a closer look at the current situation.

Bitcoin Concentration of Ownership

Bitinfocharts data from March 2023 reveals that there are around 827,000 Bitcoin addresses, each holding at least one Bitcoin, accounting for about 4.5% of all Bitcoin network addresses. Importantly, this number might not accurately reflect the total number of Bitcoin owners since one individual or entity can control multiple addresses.

In March 2023, Glassnode published an in-depth look at BTC distribution. The article takes the marine animal analogy to the next level, explaining how BTC distribution shifted over time.

01 distribution 1
Source: Glassnode

The chart shows the disproportional distribution of Bitcoin ownership. A small group of whales command a significant portion of the Bitcoin market. As of March 2023, the top 1% of Bitcoin addresses control over 90% of the total Bitcoin supply.

It will be fascinating to see how this chart looks in five years. Will new and old Whales use their entrenched resources to bulk up further, or will the mainstream crab and shrimp masses swarm the market and exponentially increase their holdings?

Why Is It Hard to Estimate Who Are the Largest Holders of Bitcoin?

One of the paradoxes of blockchain is that transparency and anonymity exist side by side. On the BTC chain, transactions are transparent; anyone can see wallet addresses attached to transactions. It is relatively simple to see which wallets hold the most BTC.

The hard part is estimating what individual or entity owns the most BTC because one owner may control several wallets. For example, Bitcoin’s creator, Satoshi, holds thousands of wallets. No one knows precisely how many, yet some estimate it to be over 20,000.

The anonymous part comes in if the wallet owner hides their identity. In the early days of crypto, setting up anonymous wallets for BTC purchases and transactions was easy. Today, many governments require crypto exchanges to implement KYC (know your customer) regulations for wallet owners.

KYC regulations combat money laundering, fraud, and illicit financing of illegal groups, and the days of genuinely anonymous crypto transactions are over. In a presentation for Wired magazine, Jackie Burns Koven, Head of Cyber Threat Intelligence at Chainalysis, said, “If anyone still believes Bitcoin is anonymous, I want to end that misconception right here.”

In that quote, she refers to the increasingly effective ways that exchanges and investigators can associate transactions and wallets with specific bad actors. We can also use these same techniques to monitor the most prominent Bitcoin account activity.

Determining the largest holders of Bitcoin involves analyzing the publicly available data on the Bitcoin blockchain. Here are some ways analysts look for clues:

Public Blockchain Ledger: Bitcoin operates on a blockchain, which is a public ledger that records every transaction ever made. This ledger is accessible to anyone and gives BTC trackers a starting place in monitoring Bitcoin transactions.

Analysis of Wallet Addresses: Each Bitcoin transaction involves wallet addresses. Analysts and researchers use tools to study these addresses. They can see each address’s balance, even though there is no direct link between the address and the owner’s identity.

Pattern Recognition and Clustering: By analyzing transaction patterns, experts can sometimes cluster multiple addresses together as likely being controlled by the same entity. For example, if several addresses transfer Bitcoin to a single address without spending, the same entity may manage them.

Identifying Known Entities: Some Bitcoin addresses are publicly known because their owners have disclosed this information. For example, companies that publicly trade or are required to disclose financial assets (like MicroStrategy or Tesla) have made such disclosures.

Blockchain Analytics Tools: Some specialized tools and platforms facilitate the analysis of blockchain data. These tools can help identify large transactions, wallet balances, and, in some cases, the likely owners of large wallets.

Community and Media Reports: The cryptocurrency community and media often play a role in identifying and reporting on large Bitcoin holders. For example, news reports, social media discussions, and research publications can shed light on who might be accumulating or holding large amounts of Bitcoin. However, media reports should always fact-checked as social media is also a common place to find rumors and misinformation.

Forensics and Transaction Tracing of the Largest Holders of Bitcoin: In some cases, forensic analysis is used, especially in tracking wallets involved in illegal activities or hacks. This analysis can also lead to identifying large wallets and their activities.

It’s important to remember that while the Bitcoin blockchain is transparent, the identities of all the wallet owners, especially those set up a few years ago, are not inherently linked to their addresses.

The Largest Holders of Bitcoin in 2023

Below is a list of the top 10 biggest holders of Bitcoin as of 2023, based on collated information from Coingape, Coincodex, and BTCC. Much of the identification process relies on voluntary disclosure, analysis of transaction patterns, and sometimes speculation. Additionally, the data can change rapidly, as Bitcoin investors can transfer between wallets in minutes.

  1. Satoshi Nakamoto (Estimated 1.1 million BTC): This is the pseudonymous creator of Bitcoin and is likely the largest holder. However, this is based on estimates and not confirmed due to the anonymity of the creator.
  2. Binance (Estimated 250,597 BTC): The cryptocurrency exchange Binance holds a significant amount of Bitcoin in its wallet, making it one of the largest holders.
  3. MicroStrategy (Estimated 132,500 BTC): This business analytics platform has invested heavily in Bitcoin, holding a substantial amount in its reserve.
  4. Anonymous Wallet (Estimated 140,165 BTC): An unidentified wallet holds a large amount of Bitcoin, remaining one of the top holders.
  5. Galaxy Digital Holdings (Estimated 16,400 BTC): This crypto-focused merchant bank is another significant Bitcoin holder.
  6. Voyager Digital Ltd. (Estimated 12,260 BTC): This cryptocurrency brokerage firm holds a notable amount of Bitcoin.
  7. Tesla (Approximately 10,055 BTC): The electric vehicle manufacturer initially invested $1.50 billion in Bitcoin.
  8. Marathon Digital Holdings Inc. (10,055 BTC): A Bitcoin mining company
  9. Robinhood (Managed by Jump Trading, significant holdings): Although not directly confirmed, analysts believe Robinhood manages a wallet with a large Bitcoin holding.
  10. FBI Wallet (Estimated 94,643 BTC): This wallet contains BTC that was stolen from the Bitfinex cryptocurrency exchange in 2016 and is now under the control of U.S. federal authorities.

Current Trends Motivating BTC Buyers and HODLers

Bitcoin will see two significant events in 2024 which may motivate investors to accumulate BTC.

Bitcoin Halving

The upcoming Bitcoin halving (or “halvening”) event in April 2024 generates significant interest among investors, as investors expect it to influence the price of Bitcoin. Historically, halving events, occurring approximately every four years and reducing the reward for mining new blocks by half, have increased Bitcoin prices.

Analysts attributed the price increase to the reduced rate of new Bitcoin creation, which, according to supply and demand principles, can lead to higher prices if demand remains strong. Investors are often attracted to buy Bitcoin ahead of these events, anticipating potential price increases as the supply of new Bitcoins slows down.

The anticipation of scarcity and the historical performance of Bitcoin post-halving are vital factors driving investor interest as the next halving approaches.

Possible BTC ETF Approval in January

Bitcoin’s value surpassed $42,000 on December 4, marking a notable high point for the year. A key factor contributing to improved investor sentiment is the anticipation that the Securities and Exchange Commission (SEC) will grant regulatory approval for a cryptocurrency exchange-traded fund (ETF).

An ETF fund would offer investors a more secure way to gain exposure to digital assets without directly owning them. It marks a key milestone in scaling cryptocurrency into mainstream finance. We expect the SEC to rule on the decision by January 10.

The Overall Market Sentiment Is Improving

Consider the crypto industry’s late-year rally as a move away from its troubled past, highlighted by legal issues faced by industry figures. Despite significant leadership scandals with Binance and FTX and regulatory action against crypto exchanges, Bitcoin has seen a remarkable growth of over 150% in 2023, positively affecting other cryptocurrencies like Ethereum, which has risen by more than 80%.

Yahoo Finance speculates that Wall Street now feels that the Federal Reserve will no longer tighten interest rates, which, along with pent-up demand, has been fueling the rise in cryptocurrency values.

Moving Ahead with Bitcoin in 2024

Is crypto finally moving out of its chaotic nebula stage to take a stable place in the constellation of world finance? Or will the naysayers be proven right if approval for the BTC ETFs sets the stage for more future losses due to Bitcoin’s volatility?

What do you think? One thing we know for sure, regardless of whether you invest in crypto, gold, trading cards, or vintage cars, is that taxes will always be a factor for investments.

If you invest in cryptocurrency, ZenLedger can help you quickly calculate your crypto taxes and find opportunities to save money and trade smarter.

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Disclaimer: This material has been prepared for informational purposes only and is not intended to provide tax, legal, or financial advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction.

Kala Philo