Despite Bear Market, Bitcoin Holders are On the Rise

Though Bitcoin’s price has been suppressed for months, this may not necessarily mean that adoption of the asset is slowing down. 

On-chain data from IntoTheBlock shows that the number of non-zero Bitcoin addresses has steadily increased since the crypto market peak in November. 

People, or Addresses?

As the crypto intelligence platform indicates, about 41.9 million addresses currently hold a balance on Bitcoin’s network. That’s narrowly shy of the all-time high of 42.07 million addresses logged in early August. 

“The number of #Bitcoin holders has been growing in the bear market,” said IntoTheBlock on the matter last week. “Over 42M addresses are currently holding $BTC, 4.5M more than a year ago.”

Addresses do not necessarily translate to new users, however. One person may use multiple addresses (ex. security purposes), while multiple people may also use one address (ex. a crypto exchange). 

For instance, some popular wallet providers like Ledger bake multi-address accounts into their systems by default. That means the wallet generates a new address for the user every time they select “receive” on their account within the software. The measure is intended to increase on-chain privacy for users, making their payments more difficult to link back to their identity.

Bitcoin’s ratio of active addresses to addresses with balances is just 2.36% this week – down from 12% back in 2013. 

In absolute terms, daily active addresses peaked in 2021, and have since hovered around 1 million. 

Bitcoin’s Distribution

IntoTheBlock data shows that Bitcoin’s ownership concentration is now 89.6% within retail hands. 

That said, “retail” holders are defined as those with less than 0.1% of the circulating supply. That amounts to 19,000 BTC – more than the amount held by billionaire Michael Saylor.

Regarding types of investors, the data shows that “Hodlers” – addresses that have held their coins for beyond 1 year – are the most common, numbering 29.78 million. “Cruisers” (1-12 month addresses) are at 14.85 million as of Monday, while the remaining 2.33 million addresses are “Traders” (1 month or less).

Over the long term, Hodlers appear to consistently rise and amass a greater share of all holders, while traders typically peak and trough with Bitcoin’s price cycles. 

That said, data from Glassnode last week showed that long-term holders have recently been selling their Bitcoin at a loss.