There are signs that Bitcoin is experiencing more widespread adoption, as there are more than 40 million addresses that hold at least one satoshi.
The number of addresses of bitcoin wallets that hold more than one Satoshi has now crossed the 40 million mark. One Satoshi is equivalent to 0.00000001 BTC and is the smallest unit of transaction that gets recorded on the blockchain. Most of the addresses that saw a marked increase in 2021 own a maximum of 0.01 BTC.
The bitcoin halving mechanism has had a great effect on the price of BTC over the years. Bitcoin miners receive progressively less BTC as a block reward for validating transactions. The rewards started out as 50 BTC per validated block, with the amount of bitcoin awarded halving every 210,000 blocks solved.
The number of bitcoins awarded per block was halved from 12.5 BTC on July 9, 2016, to 6.25 BTC on May 11, 2020. Because mining is so cost-intensive, the price of BTC must keep up as fewer rewards are doled out per block.
Comparing the numbers
Approximately 20 million addresses now own at least 0.001 BTC, up nearly 100% since 2019 when 11.5 million addresses owned the same amount. There was even an increase of 100,000 in the number of addresses that own up to 10 BTC when compared to 2019.
Almost 10 million addresses now hold a maximum of 0.01 BTC. This is a 34% increase from 7,305,539 to 9,848,972 since 2020, and nearly double when compared to 5,530,858 addresses in 2019. From these numbers, it’s tempting to conclude that retail investors are likely most responsible for the spike in addresses holding up to 0.01 BTC.
The addresses that own at least 10,000 BTC are likely custodial wallets, as big companies and wealthy institutional investors are unlikely to deal with private keys, deferring that responsibility to centralized exchanges.
The macro picture
It should be noted that an address does not equate to a user, as a user can have multiple addresses, sometimes to improve security when transacting. Hence, caution should be exercised when trying to extract insights from these numbers. What can be said is there has been an overall growth in the holdings of BTC.
Addresses in themselves cannot tell us who is driving the increase, though forensics tools are available to link addresses with certain types of activities. Companies like Elliptic and Chainalysis aid in criminal investigations via their forensic capability, to track the flow of BTC as it makes its way through different wallets, exchanges, and other channels.
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