What These Four Metrics Tell About Bitcoin


If you were to look at Bitcoin's price movements over the past couple of months, you'd be forgiven for concluding that the original cryptocurrency is in serious trouble. From an early September high of roughly USD 7,800, Satoshi Nakamoto's brainchild now resides below USD 4,000.

However, as discouraging as recent market events may be for anyone hoping that Bitcoin will 'go to the Moon,' there are other measures of the cryptocurrency's health, and these reveal that it's doing better than many people currently think.

Another interesting measure is Bitcoin's wealth distribution, which reveals how concentrated ownership of BTC is. Back in September 2017, crypto-analyst BambouClub posted a blog which showed Bitcoin's wealth distribution at the time, as recorded by BitInfoCharts.

At the time, the top 0.1% of wallets had 21.32% of all bitcoins in circulation, while now the top 0.1% owns 20.79%. Similarly, wallets containing anything from 100 to 1,000 bitcoins owned 23.31% back in September, whereas now they own 21.42% of all coins. And conversely, the five wallets containing anything from 100,000 to 1 million BTC – which belong to crypto-exchanges (and their customers) – owned 0.72% of all coins in September, but this has now increased to 3.28%.

However, one expert who warns against reading too much in such slight decreases in wealth concentration is Lisa Cheng, founder of the Vanbex blockchain consultancy and the Etherparty smart contracts platform.

“I don’t believe this is a trend we can rely for the long term,” she says. “As this is a speculative market, this is just a reflection of the whales vs. retail investors behaviour. I mean, as whales have more power and are more sophisticated investors in the ecosystem and them seeing the market is going down, they might try to sell bitcoin (for fiat or other tokens) to secure their profits. But as soon the market shifts again, the opposite could came back to place...”

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