Bitcoin has its own 1% which controls a disproportionate share of wealth
Cryptocurrency has been touted as a new form of digital currency unrelated to government or a central bank and therefore is inherently to study by the National Bureau of Economic Research suggests that bitcoin has developed its own 1% group that will likely reap most of the gains in the years to come.and . However, a recent
The NBER study found that the top 10,000 bitcoin investors own a total of 5 million bitcoins, or roughly $ 230 billion at recent prices. These numbers mean that, even though bitcoin was launched in 2009, “bitcoin participation is still very skewed in favor of a few prominent players, even at the end of 2020,” said financial experts Igor Makarov and Antoinette. Schoar, who wrote the study.
These top players make up just 0.01% of all bitcoin holders and yet they control 27% of digital currency, The Wall Street Journal reported. This compares to the old-fashioned dollar, where the richest 1% controlled 30% of total U.S. household wealth, according to the Federal Reserve. The data.
Makarov and Schoar said in their study that there was a “significant asymmetry in the ownership” of bitcoin and that “this implies that the majority of gains from subsequent adoption are likely to fall disproportionately on a small group of participants ”.
Bitcoin and other digital currencies have been at the center of many of the craziest financial gains and losses this year. Although considered a very unstable form of money by most financial experts, bitcoin, in part because more and more businesses are accepting it as a method of payment.
The WhatsApp messaging service this month began testing a new feature that it says allows US users to send money without paying a fee, using cryptocurrency. The new payment service marks another example of how digital currencies are increasingly accepted in the world..
As their popularity increases, digital currencies have been the target of many multi-million dollar scams in recent history. Between January and July, crypto accounted for $ 681 million in scam losses, according to a report by cryptocurrency intelligence firm CipherTrace.
Despite the growing popularity of crypto, relatively few people own a large portion of bitcoin, making digital currency much more vulnerable to large week-to-week price swings, Makarov and Schoar said in their study. . Makarov and Schoar collected data from the inception of bitcoin 13 years ago until the end of 2020, when there were around 15 million bitcoins in circulation. There are currently 19 million bitcoins in circulation, according to Blockchain.com The data. The maximum number of bitcoins that can ever exist is 21 million.
The study does not reveal the names of the people who own the most bitcoin.
Yet the work of Makarov and Schoar adds credibility to the Internet’s floating lists of investors with the highest crypto fortunes. Matthew Roszak, president of blockchain company Bloq, has a cryptocurrency wallet worth over $ 1.5 billion, Forbes reported in April. The Winklevoss twins .
“Our results suggest that despite the significant attention bitcoin has received over the past few years, the bitcoin ecosystem is still dominated by large and concentrated players, whether they are large miners, Bitcoin holders. or exchanges, “concluded Makarov and Schoar.