The number of whale addresses, or those holding a large number of bitcoins, has declined to a 14-month low.

However, the drop isn’t necessarily a price-bearish development and may instead indicate the distribution of bitcoin ownership is shifting. 

As of Sunday, there were 103 addresses holding at least 10,000 BTC – the lowest since May 2019, according to blockchain analytics firm Glassnode. The number has declined by 8% over that 2.5-month period. 

Ten thousand bitcoin is worth close to $93 million at press time.

btc-addresses-with-10k
Addresses holding at least 10,000 BTC
Source: Glassnode

Some may see the decline in the whale addresses as a sign of weaker buying pressure and anticipate a price drop as a result. However, Richard Rosenblum, co-founder, and co-head of trading at crypto liquidity provider GSR, suggests otherwise. 

“It’s bearish to see the biggest holders reducing their stakes, but bullish to see the market becoming more decentralized,” Rosenblum told CoinDesk in a Telegram chat. 

Market shift?

Validating Rosenblum’s comments is the growth seen in the number of lower-value bitcoin addresses over the past couple of months. 

btc-addresses-1k
Addresses holding at least 1,000 BTC
Source: Glassnode

For instance, there were 2,155 addresses holding at least 1,000 coins on Sunday, up nearly 3% from a low of 2,097 observed in April. 

glassnode-studio_bitcoin-addresses-with-balance-%e2%89%a5-1-1
Addresses holding at least 1 BTC
Source: Glassnode

Meanwhile, the number of addresses holding at least 1 BTC continues to reach new record highs. So do addresses holding 0.1 BTC and 0.01 BTC. 

As such, one could argue bitcoin ownership is being transferred from relatively few whales to a large number of smaller investors. 

“Over time, you would expect [bitcoin] to naturally dissipate to more hands,” said Rosenblum.

Data limits

Blockchains are transparent and allow every single transaction to be viewed and analyzed. Even so, drawing definite conclusions from metrics such as address growth can be challenging because a single user or an exchange can own multiple addresses.  

“Whales may not be having all of their holdings in a single address and moving crypto for risk management purposes,” said Simon Peters, a crypto market analyst at investment platform eToro. 

As such, an increase or decrease in the number of bitcoin addresses may not fully represent the entry or exit of investors. 

Disclosure: The author holds no cryptocurrency assets at the time of writing.

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