Who Invests in Bitcoin?
Large crypto investors holding enough BTC to influence the market are called “whales”. Most whales are institutional investors. This term refers to legal entities that invest their money in securities, cryptocurrencies, and real estate for profit. Institutional investors include investment funds, banks, insurance companies, and other financial institutions.
In this article, we will take an in-depth look at who invests in Bitcoin, why and how much, and review the first cryptocurrency’s ownership structure.
The Largest Corporations Holding BTC
Lots of big companies are investing in Bitcoin for risk diversification and additional profits. Here is a list of the largest public institutional BTC investors:
- MicroStrategy Inc. The American company owns 121,044 BTC. The number of initial investments amounted to ~$3.57 billion. The current value of BTC owned by the company exceeds $5.8 billion.
- Tesla. Elon Musk’s company invested $1.5 billion in Bitcoin. Part of the assets was sold, and now there are 48,000 BTC worth over $2.32 billion.
- Galaxy Digital Holdings. The bank invested $134 million in Bitcoin. In total, the organization owns 16,402 BTC, the current value of which exceeds $795 million.
- Square Inc. The firm invested $220 million in Bitcoin. Currently, the company has 8,027 BTC, or ~$389 million.
- Marathon Patent Group bought 4,813 BTC, valued at $150 million. At the moment, it has an estimated value of about $233 million.
- Coinbase bought 4,483 BTC worth $130 million, now worth over $217 million.
- NEXON Co Ltd bought 1,717 BTC at its peak in November, paying $100 million. Today, the asset is valued at about $83 million.
- Voyager Digital LTD invested about $7,93 million to buy 1,239 BTC. The asset is currently valued at $60 million.
- Riot Blockchain, Inc. Acquired 1,175 BTC worth $7,2 million. The current market value of the investment exceeds $56 million.
- Aker ASA bought 1,170 BTC for $58,6 million. However, the deal was done at the peak, so the ongoing value of the asset is ~$56,7 million;
The above data is based on information from public sources and CoinGecko’s statistics and is up-to-date as of December 21, 2021.
Different companies have different strategies for investing in Bitcoin. For example, Tesla sold 10% of its BTC holdings in March 2021, recording a profit of $101 million, while MicroStrategy Inc has increased its Bitcoin investments by 33% since the summer of 2021. The data shows that the two of the largest BTC holders bought it at its peak price moments, making it a loss-making asset for them at the time of writing.
The Most Famous Investors in BTC
Apart from the large companies, private individuals also invest in Bitcoin. Among the most successful public crypto investors are:
- Kingsley Advani. He invested in Bitcoin in 2017, spending his entire fortune of $34,000. Within six months, he became a millionaire. Today he acts as a crypto advisor with a fortune of over $5 million.
- The Winklevoss Brothers. The most famous crypto investors first bought BTC in 2012. Between 2013 and 2015, they lost about 80% of their investments. However, they did not sell the asset and became the first Bitcoin billionaires in December 2017.
- Kristoffer Koch. Koch invested in Bitcoin in 2009. At the time, he was a doctoral student writing his thesis on encryption. The student needed Bitcoin for research purposes and so he invested 150 kroner in 5,000 BTC—about $24 at that time. In 2013, the value of the purchased cryptocurrency already exceeded $886,000.
- Jeremy Gardner. He found out about BTC in 2013 and invested several thousand dollars in it. Gardner became the creator of one of the first “educational reality shows” on YouTube devoted to cryptocurrencies. He is currently a crypto millionaire. In 2018, his fortune already exceeded $8 million.
- Tim Draper. He is a professional investor considered one of the pioneers of the US venture capital business. In 2014, he bought 29,000 BTC at an FBI auction, seized from the Silk Road by the US Marshals service. The transaction amounted to $18.7 million. Today, this amount is worth more than $1.4 billion.
Obviously, these are not all the major private investors in Bitcoin, but only the most successful and publicly known ones.
BTC Ownership Structure
Let’s look at some interesting statistics from CoinGecko, Bitinfocharts, and Glassnode. 80% of investors buy Bitcoin for long-term use. Since March 2020, there has been a steady increase in the number of BTC in long-term use. In absolute terms, the number of BTC in the wallets of long-term investors has reached an all-time high.
55% of BTC is stored in wallets with 200 or more BTC. One-third of these wallets have never been used to purchase or sell the cryptocurrency.
The total value of all BTC mined as of December 21, 2021, is over $921 billion. The 27 largest public companies that have invested in crypto own 1.15% of all Bitcoins. The statistics make it clear that most wallets have an insignificant amount of BTC. Thus, wallets with more than 1 BTC are only 2.05% of the total sum of 114 million addresses. At the same time, 0.01% of the addresses contain just over 27% of the total amount of BTC, which is equivalent to approximately $245 billion at the time of writing. We can draw two main conclusions from this data:
- The Bitcoin network is subject to a high probability of systemic risk.
- The main benefits of Bitcoin’s growth and development accrue to a disproportionately small group of investors.
However, it is important to keep in mind that, according to various estimates, approximately 20% of the current Bitcoin supply, which is more than 4,2 million BTC, is permanently blocked. They are stored in wallets that are potentially inaccessible. These holdings constitute a kind of stabilization fund that makes all negative scenarios for Bitcoin untenable.