When the crypto winter came, it caused a ripple effect that numerous companies still feel to this day. However, it would seem that it also provided incentives for multiple institutional investors to ramp up their investments.
In a report published earlier this week, blockchain and cryptocurrency research firm Diar revealed that Bitcoin “whale” wallets have been able to accumulate up to 450,000 Bitcoin (BTC) over the past nine months, particularly during crypto winter.
For better reference, “whales” is the term used to reference individual- and sometimes, corporations- who own significant portions of a cryptocurrency. Diar describes whales as investors who hold between 1,000 to 10,000 BTC in custody.
However, the report does exclude Coinbase-controlled addresses because, as the firm notes, the crypto exchange was behind the creation of some of these whale wallets when it overhauled its cold storage system.
As the report notes, these individuals hold over 26 percent of the total BTC in circulation- worth a reported $36 billion. For better comparison, the firm notes that as of August 2018, when Bitcoin held the same $8,000 price tag that it hovers around today, these whales held just under 20 percent of the total currency supply.
Crypto winter spurred institutional investments
It’s worth noting that Bitcoin continued to crater in the months following August, reaching its lowest point of about $3,200 on December 25. However, even the crypto winter hasn’t stopped these whales; within that time, they’ve gone on to accumulate an additional 7 percent of the total Bitcoin supply.
These private, non-institutional cryptocurrency investors have been holding Bitcoin at massive rates, but as the firm explains, they’ve not been keeping their assets on exchanges.
Diar writes, “Bitcoins held by major addresses – mostly of which are exchanges – have seen an exodus of over 300K Bitcoins since the start of 2018. At peak, these addresses held 750,000 more Bitcoins than they do today, 21% of the total circulating supply versus 16% today.” The research firm notes that over 100,000 Bitcoins have moved into this bracket, amounting to about 40 percent of the Bitcoins minted this year alone.
It added, “Since the start of the bear market in January 2018. Since then, 955k Bitcoins have been minted through inflation as a reward to miners. For the same period, firm size addresses have slurped up half the new market supply.”
Over 300 Investors hold 33 percent of Ether
The trend isn’t just peculiar to BTC. Earlier this month, cryptocurrency intelligence firm Chainalysis published a report which revealed that just 376 individuals hold a staggering 33 percent of the total Ether (ETH) in circulation.
The report, which was titled “The Economic Impact of Whales on the Market,” defined “whales” as the top 500 shareholders within the crypto industry. However, in a way somewhat similar to Diar, Chainalysis also excluded crypto wallet providers, exchanges, and other asset-dealing service providers from its analysis.
Chainalysis claimed that 124 services make up for the top 500 ETH shareholders, while the remaining 376 were individual investors. These individuals were reported to control 33 percent of the world’s ETH supply; down from the 47 percent reported in 2016.
However, the report did also point out that these whales only account for 7 percent of the currency’s economic activity.
In part, the report reads, “Whales consistently hold 25-40% of the circulating supply of Ether, but only account for between 5% and 18% of economic transaction volume. This is because most of the whales (~60%) are holding their assets or not regularly trading with exchanges.”