By Darren Parkin
The number of investors holding at least one whole Bitcoin is now at an all-time high, according to new figures, and this trend is going to be a long-term price driver for the world’s largest cryptocurrency.
Recent data from Glassnode confirms that the number of so-called ‘wholecoiners’ is at a record high, with more than one million entities now owning a whole Bitcoin, rather than a fraction of one. This represents a jump of 20% in one year.
The research suggests that smaller crypto market investors used the crypto bear market of 2022, as well as this year’s mini price dips to strengthen their Bitcoin holdings. Now, many such participants have acquired together enough of the digital currency to get to the much-lauded ‘One Level’.
Of course, the significance of wholecoiners in relation to Bitcoin’s price lies in the concept of supply and demand.
Bitcoin has a limited supply, with a maximum of 21 million Bitcoins that can ever exist. As a result, scarcity plays a role in influencing its value. When the demand for Bitcoin increases and there is a limited supply available, the price rises.
Wholecoiners have an outsize impact on the Bitcoin price because their ownership contributes enormously to reducing the available supply. As more individuals or entities become wholecoiners, the supply of Bitcoins in circulation diminishes further, which, in turn, can potentially increase the demand for Bitcoin. The increased demand coupled with the limited supply will lead to upward pressure on the price.
Data shows that over the last year, the Bitcoin whale addresses – which are characterized by their large ownership of the cryptocurrency, often measured in thousands or tens of thousands of Bitcoins – are, in general, not selling, even when prices are soaring as they have been in 2023.
Of the research, Adam Back, CEO and co-founder of Bitcoin firm Blockstream, made a case for “hyperbitcoinization” soon to come.
He opines that should the existing trend continue, Bitcoin price growth would soon make buying it not only a luxury but something unattainable altogether.
This would happen, he tweeted, “because 10mil people trying to buy 1 BTC over a few years would push the price out of reach. And many current hodlers are not selling,” he continued.
“Eg very few of the recent whole coiners would re-sell, probably moving up to their next target for extra Bitcoin, most are trying to buy more!”
Furthermore, there’s additional pressure on the supply side of Bitcoin, which is already being squeezed by wholecoiners and whales, as it continues to get lost.
More than three million Bitcoin – worth $80.4 billion and accounting for 17% of the total circulating supply are ‘lost forever,’ according to estimates from Glassnode, which draws the figure from a combination of data including Bitcoin sent to ‘burn addresses,’ wallets with lost keys and mega accounts that have been untouched for more than a decade.
While the rising number of wholecoiners points to possible adoption and rising Bitcoin demand over time, market forces could end up capping their numbers.
I agree with a tweet by Caitlin Long the founder of Custodia Bank who wrote,”1M whole-coiners today. Probably couldn’t reach 10M whole-coiners ever tho, bc Bitcoin’s price would be bid up too high to reach that given the 21M supply cap…”
We’ve hit peak wholecoiners – but for today’s smaller investors this will likely serve to shore-up their investment in the cryptocurrency.
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