The Changing Landscape of Bitcoin Ownership: A Look at Supply Distribution

Over the past year, Bitcoin ownership has undergone significant shifts, with institutions, businesses, and individual investors reshaping the distribution of the world's leading cryptocurrency. While Bitcoin continues to mature as a financial asset, its supply is becoming increasingly diversified across different entities. In this article, we explore how Bitcoin’s distribution has changed, the role of third-party custodians, and why we still have significant room for growth in global adoption.

Charted out via RIVER, we can see how BTC ownership has shifted in 2024

Bitcoin Supply Distribution: Who Owns What?

Here we can see the distribution of Bitcoin supply in detail, ownership being led by individual holders. There will only ever be 21 million BTC. Data from RIVER

The ownership of Bitcoin has become more fragmented as adoption grows. Here’s how the distribution currently stands:

• Individuals: A growing number of retail investors are accumulating Bitcoin, with more first-time buyers entering the market. However, the quantity of Bitcoin within an individual owners wallet remains relatively small compared to a wallet of a company who is accumulating such as Metaplanet or Strategy for example.
• Businesses: Companies like Strategy continue to aggressively accumulate Bitcoin, using it as a treasury reserve asset. Other corporations are exploring similar strategies, reflecting a broader trend of corporate adoption.
• Funds & ETFs: The launch of Bitcoin ETFs has fundamentally changed the market structure. Institutional investment products now hold approximately 6% of the total Bitcoin supply, providing easier access for traditional investors.
• Governments: Several countries have started to accumulate Bitcoin, whether through direct purchases or by seizing assets. This trend signals increasing state-level interest in cryptocurrency as a reserve asset.

The Role of Third-Party Custodians in This Market Cycle

Unlike previous cycles where self-custody was the norm, we are witnessing a shift toward third-party custodians. Many businesses and funds now prefer professional custody solutions to mitigate risks associated with self-storage. This trend is driven by:

• Institutional-grade security solutions
• Regulatory compliance requirements
• The need for easier portfolio management for large-scale investors

More people are using ´´third-party´´ custodians than ever before. This is as a result of higher demand for ETFs, data via RIVER

This evolution is significant because it allows more institutional money to flow into Bitcoin without the complexities of self-custody. However, it also raises debates around decentralization and counterparty risk, which will continue to be a major topic in the space.

The Reality of Global Adoption: Still Early Days

Despite Bitcoin’s growing presence in mainstream finance, adoption remains in its infancy. Less than 4% of the world’s population owns Bitcoin, meaning that while prices have surged over the years, there is still massive room for growth. The narrative that it’s “too late” to invest in Bitcoin couldn’t be further from the truth. As traditional financial institutions, governments, and businesses continue to recognize Bitcoin’s value, we are only in the early stages of its long-term adoption curve.

Bitcoin has so much untapped potential, especially in places where economies are poised to grow in the years to come. Mapped from RIVER

Market Drawdowns: A Normal Part of Growth

Recent market drawdowns have caused concern among some investors, but it’s essential to put this into perspective. Bitcoin has historically experienced volatility, but each cycle has resulted in higher adoption and institutional involvement. Healthy market corrections are part of sustainable growth, and long-term holders continue to benefit from Bitcoin’s fundamental strengths.

Here we can see that the drawdowns are not nearly as large as in previous cycles. Nonetheless, we have yet to also see upside in this cycle. Data from Trading View and BlockWorks.

Conclusion

The past year has been a transformative period for Bitcoin ownership. As supply distribution changes with increasing institutional involvement, the role of custodians grows, and global adoption remains in its early stages, we are witnessing Bitcoin’s continued evolution into a mainstream financial asset. While volatility will always be present, the long-term outlook remains overwhelmingly positive.

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