Key Takeaways
- 69.4% of Bitcoin is held by individuals, limiting institutional supply.
- Only 5.7% of Bitcoin remains to be mined, with OTC markets running low.
- Institutions like Strategy and BlackRock continue large Bitcoin acquisitions.
A recent report by Bitwise highlights that Bitcoin ownership is heavily concentrated among private investors, with only 5.8% held by governments and businesses.
Additionally, 7.5% of Bitcoin is considered lost, while 6.1% is controlled by funds and exchange-traded products (ETPs). The wallet linked to Satoshi Nakamoto still holds 4.6% of the supply.
Supply constraints
With only 5.7% of Bitcoin left to be mined, institutions may struggle to source Bitcoin without significantly impacting price levels.
Over-the-counter (OTC) markets, typically used by institutions to avoid exchange-driven price surges, are running low on supply, with only 140,000 BTC remaining, according to analysts.
Market impact
Bitwise CEO Hunter Horsley noted that despite steady corporate and ETF buying, Bitcoin’s price has not surged significantly, suggesting that institutions are primarily sourcing Bitcoin from OTC markets.
However, as OTC liquidity dries up, institutions may be forced to buy from exchanges, driving prices higher.
Institutional accumulation
Companies like Strategy (formerly MicroStrategy) and asset managers such as BlackRock continue accumulating Bitcoin at an aggressive pace.
Strategy recently purchased 7,633 BTC for $742.4 million, bringing its total holdings to 478,740 BTC, worth over $47 billion.
Meanwhile, BlackRock acquired $1 billion worth of Bitcoin in January and continues adding to its position daily.
Future outlook
As Bitcoin adoption accelerates, Coinbase CEO Brian Armstrong predicts that Bitcoin could reach billions of users by 2030.
With a shrinking available supply, institutional buyers may soon face a supply shock.
