Bitcoin retail investors now hold 17% of total BTC supply, but is that good news?

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The number of Bitcoin retail investors is on the rise. These smaller investors have less buying power, but with so many new market entrants following the 2020-2021 bull market, their collective buying power has increased along with the total amount they hold.

Retail investors hold 17% of supply

Over the past few years, bitcoin addresses holding less than 10 BTC in their balances have picked up more BTC supply. Recent data from on-chain data aggregator Glassnode shows that these smaller investors now hold 17% of the total BTC supply.

This subset of investors has grown nearly 50% over the past two years, from about 12% to 17.3%, and an increase of 0.5% over the past 30 days, the data de Santiment showing the percentage of supply held by addresses holding between 0.001 and 10 BTC was sitting at 16.8% on November 1, 2022.

Interestingly, this base of BTC holders had seen a significant drop in early November. This coincides with the collapse of the FTX crypto exchange, taking with it a good number of investor coins. However, the recovery was quick and traders started to rebuild their balances again.

Retailers held less than 17% of supply on November 1 | Source: Santiment

The increase in the number of retail investors follows the same patterns as previous bull markets, such as the 2017 bull market. the entire supply of BTC.

Is this good news for Bitcoin?

The accelerating adoption rate was good news for bitcoin and was a major driver of the 2021 bull market. Looking back, the increase in the number of retailers has always been good news for the digital asset. It propels cryptocurrency adoption and helps distribute the total supply to more holders.

Currently, the vast majority of BTC supply is still controlled by the big guys. With more retail investors buying coins, there is more demand for the digital asset. Greater demand leads to scarcity, and scarcity breeds higher prices.

BTC losses stand at $17,000 to settle below $16,900 | Source: BTCUSD on TradingView.com

However, it is also important to consider the current crypto market climate. The crypto winter is in full bloom, so the next bull market could still be a year away. Given this, adoption will likely help maintain the current price trend rather than trigger a rally.

Nonetheless, the steady increase in wallets holding less than 10 BTC shows more interest from the broader investor community. This also marks a significant accumulation among retail investors during this period.

Featured image from Coincu News, chart from TradingView.com

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