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On May 20, Custodia Bank founder Caitlin Long retweeted and revived an intriguing question posed by Blockstream CEO Adam Back about whether the number of so-called bitcoin “holecoiners” has peaked.
Are The Number Of Bitcoin Holecoiners On The Rise?
His question is that last week the number of wholesale coins, or individuals holding at least 1 BTC, exceeded 1 million.
While the growing number of wholesale coins points to potential adoption and growing demand for BTC over time, market forces could reduce their numbers.
He believes that as the price of bitcoin rises, it will become more expensive for a potential wholesaler to purchase the asset. So, based on these factors, 10 million is unlikely to happen in the coming years.
Are We at the Peak of Hole-Coiners? #bitcoin Invocation @adam3us, 1M hole-coiners today. Possibly never reaching 10M full-coiners, bc bitcoin price will be heavily bid up to reach 21M supply cap… pic.twitter.com/vzRvv2vyAW
— Caitlin Long 🔑 ⚡️🟠 (@CaitlinLong_) May 20, 2023
On May 13, on-chain analytics firm, Glassnode, revealed That the number of addresses managing at least 1 BTC has passed the 1 million mark and continues to grow.
This upward trend has been persistent, mitigating the effects of the crypto winter, which saw BTC prices record highs of over $69,000 in November 2021, falling to less than $16,000 in Q4 2022.
Despite this impressive trend, Long and Adam’s observations cast doubt on whether this can continue over the long haul, pushing the number of wholesale coins minted into the double digits.
By design, bitcoin is deflationary and there will always be 21 million BTC in circulation. As inflation also subsides due to BTC halving every four years, coin holders can expect BTC prices to gradually increase over the years.
Based on historical performance and growth in crypto adoption, market forces could drive BTC prices up, making it challenging for more users to own 1 BTC, which is currently trading at over $26,900 as of May 2019. Used to be.
Less than 2.5% of BTC addresses are holecoiners
While the number of wholesale coins continues to grow, there is a divide between long-term investors and short-term speculators.
Long-term bitcoin holders have demonstrated resilience during market volatility, holding their positions rather than selling. On the other hand, speculators have been known to exit USDT and cash in times of high volatility. For their actions, short-term holders or speculators have been labeled as “weak hands”.
So far, BitInfoCharts data shows Less than 2.5% of all bitcoin addresses hold at least 1 BTC. As of May 21, addresses between 1 and 10 BTC accounted for 2.1% of the total. Meanwhile, the number of whales, or those holding above 100 BTC, represents less than 0.033% of the total addresses.
Roughly 93% of all bitcoin addresses were held between 0.00001 and 0.0001 BTC.
Featured image from Canva, Chart from TradingView
