The top 0.01% of Bitcoin holders control nearly a THIRD of the digital currency valued at $ 232 billion

Bitcoin ownership is highly concentrated, with just 0.01 percent of all holders controlling 27 percent of the cryptocurrency, a new study found.

The top 10,000 Bitcoin accounts hold 5 million bitcoins valued at approximately $ 232 billion at current prices, according to the latest study by the National Bureau of Economic Research.

This concentration brings with it a “systemic risk” as a small number of people could cause prices to fall if they were to sell their inventory all at once.

“Even though it’s been around for 14 years and there’s been a hype, it’s still a very concentrated ecosystem,” Antoinette Schoar, co-author of the study with the MIT Sloan School of Management, told the Wall Street Journal.

The study, conducted by mapping every transaction in Bitcoin’s history for the first time, found that the concentration of wealth in the cryptocurrency is greater than that in the US economy as a whole.

The top 10,000 bitcoin accounts hold 5 million bitcoins, valued at approximately $ 232 billion at current prices, and 27% of the total available, a new study found

In the United States, where wealth inequality has grown rapidly, the top 1 percent of households own about a third of all wealth, according to the Federal Reserve.

The study by Schoar and Igor Makarov of the London School of Economics warned that despite its promise of decentralization, Bitcoin will be highly concentrated in several key ways.

An estimated 114 million people hold Bitcoin globally, but nearly a third of the value is concentrated in 0.01 percent of accounts, according to the study.

The authors found that the major bitcoin exchanges account for 75 percent of the real bitcoin transaction volume and that bitcoin mining capacity is “highly concentrated”.

Bitcoin has risen since March 2020 when it was trading at around $ 5,000, hitting a high of $ 68,990.90 last month. It has since fallen from its record highs

When Bitcoin first hit the market, anyone could create a node on their computer to process transactions, also known as mining, but the endeavor is now highly specialized and requires a great deal of computing power.

“Our results suggest that despite the significant attention Bitcoin has received in recent years, the Bitcoin ecosystem is still dominated by large and concentrated players, be it large miners, Bitcoin owners or exchanges,” they write Authors.

“This inherent concentration makes Bitcoin vulnerable to systemic risk, and it also implies that most of the gains from further adoption are likely to be disproportionate to a small group of participants.”

The total number of bitcoins ever created is algorithmically capped at 21 million.

An estimated 114 million people hold Bitcoin globally, but nearly a third of the value is concentrated in 0.01 percent of accounts, according to the study

There are currently around 19 million bitcoins in circulation and the rate of re-creation of coins is slowing over time.

More than 1 million bitcoins, valued at approximately $ 50 billion, are owned by the creator of bitcoin known as Satoshi Nakamoto, whose true identity is unknown and whose accounts have remained untouched for more than a decade.

Bitcoin has risen since March 2020 when it was trading at around $ 5,000, hitting a high of $ 68,990.90 last month. It has since slipped from its record highs.

On Monday, the cryptocurrencies Bitcoin and Ether gave way, with Bitcoin falling 1.5 percent to $ 46,147.78 and Ether down 2.2 percent to $ 3,819.51.