A key metric in the Bitcoin blockchain, shown by the Glassnode analysis website, has grown significantly in the past 12 months, possibly indicating a constant accumulation of Bitcoins by retail merchants: the number of wallets with more than 1 Bitcoin
According to Glassnode lists, on January 14 there were 784,000 addresses with one or more Bitcoins, almost 11% of the 707,000 views a year ago. The total number has more than doubled since the beginning of 2015.
The number coincides with another record set in 2019, that of the total number of Bitcoin wallets. Total portfolios reached 28.39 million, the highest figure since October 2018.
"The steady increase is the result of the accumulation of retail buyers," said Connor Abendschein, cryptography analyst at Digital Assets Data in Denver.
Sardines and whales
Address growth can also come from exchanges and important players, known as "whales," although these addresses generally have large balances and are generally at the top of Bitcoin's "richest list," which puts them in an address table that contains more Bitcoins.
For example, three of the five main addresses in the richest list published by bitinfocharts.com belong to three of the most important exchanges in the world: Huobi, Bitfinex and Binance. At the top of that list is Huobi's offline wallet, currently with 255,500 Bitcoins.
Meanwhile, the number of addresses with balances between 0.1 BTC and 1 BTC has also increased, on average, by 10% per year. However, these small balances can be the residue of large transactions or holdings of a single user.
Adoption as a reserve of value
"The growing number of addresses that accumulate large amounts of Bitcoin is also a sign that adoption as a store of value is increasing," Abendschein said.
The accumulation in retail trade, represented by the growth in the number of addresses with one or more cryptocurrencies, has remained strong over the years, despite price variations.
Bitcoin prices increased from $ 3,600 to $ 13,880 in the first six months of 2019, before falling to $ 6,430 in December. Even so, the number of addresses with one or more Bitcoins has increased by 77 thousand addresses in the last 12 months.
This type of investor behavior is observed in asset markets intended to protect and reserve value, such as gold. Yellow metal, a classic asset of refuge and value reserve, generally finds buyers worldwide, regardless of short-term price trends.
However, many observers, including investors such as the billionaire investor and founder of Bridgewater Associates, Ray Dalio, believe that Bitcoin is simply too volatile to become a suitable alternative to gold as a store of value.
"Address balances are a good benchmark for potential single users," said Yassine Elmandjra, cryptographic asset analyst at ARK Invest. "The growth of the unique addresses of Bitcoin suggests a continuous increase in the distribution of wealth in that market."
However, the market is still dominated by large investors. In December, investors who had portfolios with 1,000 to 1 million Bitcoins accounted for 42.1% of the total offer, compared to 37.9% seen during the last major increase in the market at the end of 2017.
In addition, the increase in the number of unique addresses does not necessarily mean an influx of new investors into the market. After all, a single investor can store 1,000 BTC in 1,000 addresses or more, which makes this metric have its limits. Therefore, the increase in the number of addresses with a balance of one or more Bitcoins does not necessarily imply greater market share. But it is a positive sign of greater movement.