As banks buy up bitcoins, who else are the 'Bitcoin whales'? (2024)

The price of Bitcoin is close to its all-time high, thanks in large part to US finance giants.

Investment firms like Grayscale, BlackRock and Fidelity, are pouring billions of dollars into buying the volatile digital asset.

In the last few weeks, these powerful institutions have become so called 'Bitcoin whales'.

Because of Bitcoin's system there will only ever be 21 million bitcoins.

19 million have been created, but many are already accounted for and probably off the market.

So what other organisations or individuals are Bitcoin whales, and what does the shift in wealth mean for the digital currency that was originally created as a peer-to-peer internet money?

The figures below are estimates gathered from direct research and published information, but should give a good overview of how Bitcoin is distributed. Our data collection ended on the morning of 29 February.

Estimates for how many bitcoins are lost forever vary between three million to as many as six million. Bitcoins can be lost because people forget the details of their digital wallets - there is no 'customer support' in Bitcoin. Just ask James Howells, who lost 8,000 bitcoins on a discarded hard drive in Wales.

Some of these lost bitcoins might also come from abandoned criminal proceeds left untouched. According to crypto-investigators at Elliptic, 3.15 million bitcoins have been dormant for 10 years or more. Some analysts - like those from investigators Chainalysis - say Bitcoin that hasn't been moved in five years could also be lost too. So millions more bitcoins could potentially be added to the lost pile.

A loose estimate that's often agreed upon is 3.5 million. But 1.1 million of those dormant coins are likely to belong to the anonymous creator of Bitcoin, so we can take that portion out of the equation. A conservative estimate for lost coins therefore is about 2.4 million, or 11% of all bitcoins.

Cryptocurrency exchanges act like banks for crypto-users. You can exchange your traditional money like dollars or pounds for Bitcoin and other digital tokens. K33 researchers estimate that about 2.3 million bitcoins are kept by exchanges, either on behalf of customers or as float. Binance is the world's largest exchange and is estimated to have about 550,000 bitcoins - followed by Bitfinex (403,000), Coinbase (386,000), Robinhood (146,000) and OKX (126,000). In total it is thought exchanges hold about 11% of all bitcoins.

Leaving your coins on an exchange can go wrong though, for example with the collapse of FTX which left customers without access to their coins. Some Bitcoin purists are also uneasy about how a reliance on large and increasingly regulated and legally compliant exchanges goes against the anti-establishment ethos of Bitcoin.

The way that Bitcoin was invented means there can only ever be 21 million coins. Every coin has to be mined using a network of volunteer computers around the world. These computers - often owned by large Bitcoin mining companies - act like high-tech accountants checking and securing the record of Bitcoin transactions. In return for the work, the computers are automatically rewarded with Bitcoins.

Over time, the amount of coins given out as part of the mining reward is automatically reduced and in April it will halve again, squeezing the supply of new coins further. There are still about 7% of coins yet to be mined, and it is estimated that the last Bitcoin will be created in 2140.

In January, US financial authorities allowed regulated investment firms to start selling new financial products linked to Bitcoin, called Spot Bitcoin ETFs. In mid-February, the investment giants that applied to start ETFs began buying bitcoins in their thousands, as everything from hedge funds to stock market traders purchased ETFs to bet on the price of Bitcoin, without having to own any coins themselves.

According to K33 Research, 933,000 coins had already been allocated or purchased by 29 February, and are currently being held by the institutions for these new financial products. K33 analysts think that the biggest holder is Grayscale, which started as a digital currency investment firm. It is estimated to have around 450,000 bitcoins. Other giants include BlackRock (150,000) and Fidelity (102,000).

Most crypto-fans online are celebrating the rise in their personal fortunes thanks to the financial establishment pumping up Bitcoin's value through increased demand. But some have expressed concerns about a consolidation of power and wealth into the traditional regulated banking system that Bitcoin was invented to replace. These financial giants now hold about 4.5% of all coins. One wonders what Satoshi Nakamoto will think if and when the banks overtake him/ her in their bitcoin holdings.

In a flurry of disastrous hacks and mishaps, the world's first major crypto-exchange, Mt Gox, lost about 850,000 bitcoins in 2011. Mark Hunter, the author of a book about it, says there is still confusion about what happened to the coins, but it is assumed that the majority have been sold back to the open market by the thieves.

However, 80,000 bitcoins sit untouched in a now famous crypto- wallet address starting with '1Feex'. This stash will probably never be recovered or moved. Another 2,600 bitcoins were also accidentally and irreversibly destroyed during the chaos. Some of the customers who lost their savings in the hacks have begun to receive a portion back from recovered coins.

Bitcoin mining companies run warehouses full of powerful computers, whirring away to keep the public blockchain of transactions up-to-date. In exchange for the work, the Bitcoin system automatically rewards them bitcoins in a process called mining. Bitcoin mining is controversial because of the environmental cost of running the computers and keeping them cool. It has become harder over time to successfully mine for Bitcoin, so large companies make up the lion's share of the Bitcoin mining pool around the world.

Many of them are not public, but according to research from K33 the largest 8 publicly listed ones hold around 40,000 bitcoins. The largest include Marathon (16,000), Hut8 (9,000) and RIOT (7,600).

A ball-park figure for how many bitcoins are held by the general public is what's left - 10.5m bitcoins. This is about 50% of all bitcoins that exist today when you take out all the above chunks that we know about. This number will be higher when you factor in the coins held by exchanges, as most of those are owned by people too. But it might also be lower if the number of lost coins is higher or the amount of coins that bitcoin whales are sitting on is more than we know.

No-one knows for sure how many individual people own bitcoins, but crypto-tech company River estimated that Bitcoin had 81.7 million users, external as of June 2023, or 1% of the global population.

Interestingly, research suggests that the latest surge in the value of Bitcoin is not coming because individual retail investors are buying bitcoins. Analysts at IntoTheBlock say Bitcoin whales like the big banks are pushing up price and demand, external - not an increase in ordinary people turning to this peer-to-peer digital cash.

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