1 in 3 bitcoin millionaires have either strong hands or forgotten passwords
Hodling is closer to the rule than the exception, even among the richer bitcoin wallets.
A new study by Diar has crunched some numbers in a new way, as studies are wont to do, and discovered a few things about bitcoin holders.
The less surprising part might be that over 55% of bitcoin currently sits in millionaire wallets, defined in this case as wallets holding 200 or more bitcoin, currently worth about US$1.27 million.
Bitcoin's wealth distribution is widely known to be enormously skewed to the rich, with just 1% of wallets holding about half of all bitcoin. That's almost exactly the same as the world as a whole, with the top 1% holding about 50% of global wealth. The trickle-up effect is strong.
- Update: The Diar study estimates that 0.1% of wallets hold 62% of all outstanding bitcoin, in contrast to the source above which estimates that 1% of wallets hold about 50% of all outstanding bitcoin. Just choose whichever narrative best fits your world view.
Much more surprising might be Diar's findings that over a third of the bitcoin collectively sitting in those millionaire wallets have never made an outgoing transaction. These rich collectors either have some very strong hands, in crypto parlance, or they have forgotten their passwords.
Strong hands refers to having the strength to keep holding "bags" of cryptocurrency regardless of price changes. In bitcoin land it means resisting the urge to sell through faith that it will keep going up forever as its non-traditional economic model attempts to dictate.
According to Google trends, interest in "strong hands" as a search term peaked in December-January right as cryptocurrency prices did, so it might mostly be used in the context of resisting the urge to sell at high prices, or strong hand-havers being rewarded for holding their bitcoin bags over the price slumps of the preceding years.
That time of year also coincided with a new influx of strong hand-havers. If you bought bitcoin at its all time high, there might be some consolation in knowing that many rich people did too.
While a third of millionaire (200+BTC) wallets have never made any outgoing transactions, that number goes up to 42% when you look at the period of December 2017 to September 2018. Of that 42%, more than a quarter (27%) have even continued to add to their stashes throughout the year.
These findings are a broad mirror of previous analyses, such as Unchained Capitals' "hodl waves" study which points at a much stronger inclination towards hodling and strong hand-having among most bitcoin holders than one might generally expect.
"Impressively, 1/3 of the Bitcoins that are sitting in these [millionaire] wallets, have never made an outgoing transaction, which, outside of exchange wallets could indicate either lost private keys, lowering real supply, or a very strong resolve by cryptocurrency believers."
"Long-term investors are keeping the faith in the king of cryptocurrencies despite the bears market in 2018," Diar says. "The top-heavy ownership of Bitcoins of course does not indicate a select number of wealthy individuals solely however, as the largest wallets are owned by cryptocurrency exchanges that are holding the coins on behalf of clients. In fact, 3.8% of the total bitcoin supply are currently sitting in the top 5 wallets that are known to be managed by major exchanges – approx. $4.2Bn in value."
Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VET, XLM, BTC, ADA