Bitcoin has been lauded as the “answer to income equality” and “the dawn of the single greatest wealth transfer in history.”
The vast majority of bitcoin in circulation is owned by a tiny elite. Just like the vast majority of global money is owned by the 1%.
It’s time to reassess the idea that bitcoin is a model for redistribution of wealth and equality.
The 1% own 87% of Bitcoin Supply
According to research published in China’s National Business Daily, almost 90% of circulating bitcoin supply is held in just 0.7% of wallets.
The huge concentration of crypto wealth can probably be attributed to cryptocurrency exchanges like Coinbase and Binance. Crypto exchanges hold funds in their wallets on behalf of its users, so that wallet may represent thousands of crypto users.
In terms of monetary value, the 0.7% of wallets control $62 billion in bitcoin (correct on January 7th).
Limited Bitcoin Supply
The research also revealed that 97% of crypto wallets held less than one bitcoin.
The limited bitcoin supply (only 21 million bitcoin will ever be created) means that only a fraction of people on earth can own a full bitcoin. As Jameson Lopp pointed out, there aren’t even enough bitcoins for each Coinbase user.
To become part of the bitcoin 1%, you need only a modest 0.28 BTC, according to one estimate. And that’s before you consider lost and stolen coins.
While bitcoin is a model for economic freedom, it is unlikely to alter existing wealth structures. The 1% will still hold the vast majority of money supply, whether it’s fiat or digital.
Further reading: Who are the Bitcoin Whales? (Criminals, Traders, and Early Adopters)