Private Investors Hold Only 14% Bitcoin Addresses, Study Shows

Blockchain analytics firm Chainalysis in a recent study revealed that around only 14 percent or 25 million address are held by private investors as a major chunk is registered under named servers.
“Out of the 172 million economically relevant addresses, Chainalysis has identified 147 million, or 86%, as belonging to named services, such as an exchange or a darknet market,” stated the analytics firm.

While the Bitcoin blockchain contains over 460 million addresses, only about 37% are economically relevant. Read more in our latest research:

— Chainalysis (@chainalysis)

The New York-headquartered firm analyzed all addresses – 460 million – created so far and found only 172 million addresses are economically relevant as they are under control of people or services owning Bitcoin. However, out of these addresses, only 27 million address actually hold any amount Bitcoin.
“…only 37% of these are economically relevant. At Chainalysis, we have identified that 86% of these belong to a named service. The remaining addresses are largely used to facilitate payments, meaning that just 20% of transaction value on the Bitcoin network is an economic transfer, moving bitcoin between two different parties,” Chainalysis noted.
The firm also detailed that a mere 20 percent of all Bitcoin transactions have economic value.
Cryptography in Action
Bitcoin’s core cryptography makes the transactions more complicated as compared to digital fiat transactions. If a seller with 10 Bitcoins in the wallet want to sell one, the person has to empty his or her address of all ten bitcoins but will receive nine back in change. Though the effective value of the transaction is worth only one Bitcoin, the blockchain will register a transaction value of 10 Bitcoins.
This creates a lot of ‘connective tissue’ addresses which holds Bitcoin for a short period of time, usually less than a day.
“They are typically single use and hold bitcoin for only a short time. For instance, three-quarters have held bitcoin for less than a day. The majority of these addresses are either change addresses or ‘connective tissue’, meaning they hold bitcoin for a short time to facilitate payments between people and services,” stated Chainalysis.
Last year, while Bitcoin was lingering around its peak, Chainalysis reported that around then valued at $37 billion were lost forever. Another study, earlier this year, revealed that only , otherwise known as ‘sharks’, were holding more than 34 percent of the network.