1 Million Bitcoin Addresses Milestone: Decentralization vs Wealth Concentration Debate

Sunset-lit bitcoin, group of diverse hands holding coins, soothing pastel colors, decentralized connections symbolizing financial system, contrasting wealth distribution balance vs imbalance, sense of harmony, artistic abstract representation of mainstream adoption & price stability.

Despite a significant price drop from its record high of $69,000 in November 2021 to around $26,8000, the number of Bitcoin addresses holding more than 1 BTC has reached the one million milestone, according to data from Glassnode. The price drop has enabled more people to jump on the bitcoin bandwagon and enjoy the benefits of a decentralized financial system.

The growth in the number of full Bitcoin addresses is inversely correlated to its price. As Dan Ashmore, head of research at Investoo Group, suggests, holding a full Bitcoin is equivalent to roughly half the median US salary, making it harder for many to acquire if Bitcoin prices return to their record highs. Furthermore, the growth trajectory of addresses containing one or more Bitcoin changes as its price increases or decreases, and this pattern is not likely to change going forward.

It is crucial to note that one Bitcoin address doesn’t always correspond to one individual, as certain individuals control multiple addresses, and some addresses may belong to institutions or groups of people. Nevertheless, the one million milestone underscores how Bitcoin has firmly established itself in the mainstream realm in recent years.

Despite inherent decentralization within the Bitcoin network, the distribution of wealth remains more focused than is generally assumed. According to BitInfoCharts, only 7% of Bitcoin’s supply is distributed among nearly 46.5 million addresses with at least some bitcoin. The other 93% exists within the one million addresses holding a full BTC. This concentration in the distribution of Bitcoin may be affected by the vast amount of BTC within crypto exchange addresses, led by Binance, Coinbase, and Bitfinex.

Erik Saberski, vice president of data science at The Tie, points out that even distribution across financial systems contributes to stability in associated asset classes. In contrast, a smaller number of holders lead to imbalanced buying and selling pressure, causing significant price fluctuations. Therefore, more people holding a full bitcoin could indicate increased price stability and reflect Bitcoin’s maturation.

Cryptocurrency adoption happens on a much slower timescale, and a measure for adoption does not necessarily suggest anything about the market in the short term. However, with more people holding a full Bitcoin, it could serve as a signal of broader growth in the overall digital asset ecosystem.

Source: Blockworks

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