During the 12-year history of Bitcoin development, different players and niches were responsible for driving the price and adoption of cryptocurrency, accumulating a large part of the Bitcoin available supply.
In the beginning, cypherpunks were responsible for buying and developing the cryptocurrency, through classic forums such as Bitcointalk. In 2010, for example, US software developer Gavin Andresen distributed 19,700 BTCs as a way to drive adoption. Using the domain “freeBitcoin.appspot.com”, Andresen gave 5 BTC a day to users who solved a simple captcha.
Gavin isn’t the only one distributing Bitcoin. In an exclusive interview with Cointelegraph, Dustin D. Trammell, one of the first Bitcoin miners in history, tells how he spent his Bitcoin, ”I gave a lot to promote Bitcoin. I bought a lot of Casascius coins and bitbills and distributed them to hacker and computer security conventions, Renaissance fairs, parties, I left them as tips in restaurants, etc.”
Initiatives like that of Gavin and other cryptocurrency enthusiasts have caused other people to start looking at the crypto asset. In 2013, Coinbase reported the sale of $1 million in Bitcoin in a single month. Was the beginning of the ”Retail Era’. We moved from cypherpunk to the ”internet enthusiasts”, who were responsible during the first few years of the asset to exponentially raise the price of Bitcoin.
In 2020, the cryptocurrency sector experienced a major change that was concerning to the profile of Bitcoin investors. Coinbase’s SEC IPO form showed that the volume of companies, funds, and family offices buying Bitcoin surpassed that of individuals in Q4 2020 for the first time in history.
Throughout 2020, companies bought a lot of Bitcoin, driven by the launch of new products for institutional investors. The purchase of these institutions completely changed the profile of cryptocurrency investors, creating new Bitcoin whales, which are dominating the sector.
A Bitcoin whale is a cryptocurrency term that refers to individuals or entities that hold more than 1.000 BTC.
In addition to some unknown individual whales, such as Satoshi Nakamoto himself, we can mention four large groups responsible for keeping large amounts of Bitcoin and can be called whales: governments, public companies, private companies, and ETFs / ETPS managers.
ETFs – 818,775 BTC
An exchange-traded fund is a type of investment fund and exchange-traded product, i.e. they are traded on stock exchanges. ETFs are a long-awaited investment mechanism by cryptocurrency enthusiasts due to the instrument’s capital-attracting potential. Many companies have filed ETF applications with the SEC, but none have yet been accepted.
The first attempt at the Bitcoin ETF came from Cameron and Tyler Winklevoss, the brothers responsible for running Gemini, one of the largest cryptocurrency exchanges in the world. The SEC officially rejected the proposal in March 2017. Also in 2013, SolidX submitted a proposal for its Bitcoin fund. In subsequent years, many other ETFs were registered. Although ETFs have not yet been successful in the United States, the story is different in Brazil and Canada.
In February 2020, Canadian regulators gave the green light to the world’s first 100% Bitcoin ETF for “Purpose Bitcoin ETF”, managed by Purpose Investments Inc. The fund is traded on the Toronto Stock Exchange under the ticker BTCC and has Cidel and Gemini as custodians and Ernst and Young (EY) an auditor. Subsequently, Canada approved the Evolve Bitcoin ETF (EBIT) and the CI Galaxy Bitcoin (BTCX) ETF.
In addition to traditional ETFs, Grayscale and CoinShares Trusts are considered the financial instruments with the highest adhesion of institutional investors in the world. Grayscale owns 654,600 Bitcoin and CoinShares 48,466.
Currently, Bitcoin ETFs are responsible for managing more than 818,775 BTCs (3.8% of the supply).
Countries – 259.879 BTC
Despite countries’ controversial stance on Bitcoin, some governments have been holding Bitcoin for some time. The most common stories include Bulgaria (213,519 BTC) and Ukraine (46,351), totaling 259,870 BTCs.
KiwiSaver Growth Strategy, a $350 million retirement plan operated by New Zealand Wealth Funds Management, has allocated 5% of its assets to Bitcoin, highlighting the steady stream of institutional investors entering the digital asset space.
The county of New Jersey made 250% profit on cryptocurrencies seized in 2018 and the government of Iran can earn more than $1 billion in annual revenues from Bitcoin mining.
Public companies – 214.396 BTC
Currently, more than 36 public companies in the United States are exposed to Bitcoin. Together, the publicly traded companies hold 214,396 Bitcoin (1.02 percent of the 21 million minable).
The public company with the highest percentage of Bitcoin in its treasury is MicroStrategy, with 105,085 Bitcoin. MicroStrategy has been exponentially increasing its custody, printing more than $1.6 billion in junk bonds to continue buying Bitcoin. Second, with a more moderate position, is Tesla, with 42,902 BTCs.
Mining companies such as Hut 8, Riot Blockchain, and Marathon Digital Holding are also on the list.
Private companies – 157,744 BTC
Private companies with a Bitcoin position have taken a more aggressive approach to Bitcoin custody. A list of just 7 names is responsible for the custody of more than 157,744 Bitcoin (1,021% of the total of 21 million).
The biggest highlight goes to Block.one, with custody of more than 140,000 Bitcoin. Second place goes to Stone Ridge Holdings, with 10,000 BTCs, and third, to Massachusetts Mutual, with 3,500 BTCs.