The number of private investors in Bitcoin is increasing. These smaller investors have less buying power, but with so many new entrants to the market after the 2020-2021 bull market, their collective buying power has grown along with the total amount they hold.
Retail investors own 17% of the supply
In recent years, bitcoin addresses with less than 10 BTC in their balance have picked up more BTC supply. Recent data from on-chain data aggregator Glasnode shows that these small investors now control 17% of the total BTC supply.
This subset of investors has grown nearly 50% over the past two years from about 12% to 17.3%, and up 0.5% in the past 30 days, as data from Sanitation shows the percentage supply of addresses with between 0.001-10 BTC on November 1, 2022 at 16.8%.
Interestingly, this BTC holder base had dropped significantly by early November. This coincides with the collapse of the FTX crypto exchange, causing the loss of a large number of investor coins. However, the recovery has been swift and retailers are rebuilding their balances.
Retail holders held less than 17% of supply on Nov. 1 | Source: Santiment
The increase in the number of retail investors follows the same patterns as previous bull markets, such as the 2017 bull market. This is reflected in the fact that by early 2021, these small holders will only account for 13.9% of all BTC supply.
Is this good news for Bitcoin?
The accelerated adoption rate has been good news for bitcoin and has been one of the main drivers behind the 2021 bull market. Looking back, the surge in shopkeepers has always been good news for the digital asset. It boosts adoption of the cryptocurrency and also helps to distribute the total supply among more holders.
Currently, the vast majority of BTC’s supply is still controlled by majors. With more private investors buying coins, the digital asset is in higher demand. More demand leads to scarcity and scarcity leads to higher prices.
BTC losses footing at $17,000 to settle below $16,900 | Source: BTCUSD on TradingView.com
However, it is also important to consider the current climate in the crypto market. The ‘crypto winter’ is in full bloom, so the next bull market could be another year away. Given this, adoption will likely help maintain the current price trend rather than trigger a rally.
Nevertheless, the steady increase in portfolios holding less than 10 BTC shows more interest from the wider investor community. It also marks significant accumulation among smaller investors during this period.
Featured image from Coincu News, chart from TradingView.com