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Bitcoin Ownership Increasingly Concentrated In a Few Hands: Study

The top 1% of Bitcoin holders control a greater share of the cryptocurrency than the most affluent American households’ control in dollars, according to a new study by the National Bureau of Economic Research.

The study found that the top 10,000 Bitcoin accounts hold five million of the digital coins, equal to $232 billion U.S.

With an estimated 114 million people globally holding the cryptocurrency, according to, that means that approximately 0.01% of Bitcoin holders control 27% of the 19 million Bitcoin that are now in circulation.

By comparison, in the U.S., where wealth inequality is at its most extreme in decades, the top 1% of households hold one-third (33%) of all wealth, according to the U.S. Federal Reserve (Fed).

The study, conducted by the Massachusetts Institute of Technology (MIT) and the London School of Economics (LSE), analyzed every transaction in Bitcoin’s more than 13-year history.

The impact of the centralization in Bitcoin are twofold. First, it makes the entire Bitcoin network more susceptible to systemic risk. Second, it means that most of the gains from the rising price and increased adoption go to a disproportionately small group of investors.

Bitcoin was introduced in 2008 as an open-source software project intended to be an electronic form of physical cash without gatekeepers. Anybody could download the software, become a “node” on the network, and “mine” for Bitcoin.

In practice, though, Bitcoin ownership has become highly centralized. Most people who trade do so through exchanges. The costs of mining have become so high that only a small group of enterprise-level firms can afford to do it.

The wealth of Bitcoin miners and exchanges has skyrocketed over the past two years as the price of a single Bitcoin jumped from $5,000 in March 2020 to as high as $68,990 last month (November).

The number of people holding Bitcoin more than doubled and now include a number of well-known investors such as hedge-fund manager Paul Tudor Jones, and entrepreneurs Elon Musk and Mark Cuban.

At the same time, scams, gambling sites and other illicit uses of Bitcoin are on the rise, comprising about 3% of all Bitcoin transactions now, the study found.