A study conducted by blockchain research firm Chainalysis found that 1,600 wallets control a total of $37.5 billion worth of bitcoin, roughly one third of the cryptocurrency’s available total, as its market cap is, at press time, of roughly $124 billion.

The firm’s research, according to the Financial Times, showed that each of these 1,600 wallets contained at least 1,000 BTC. The wallets, belonging to unidentified whales, have a total of about 5 million bitcoins. Whether exchange cold storage wallets were included in the study is unclear.

At press time, bitcoin is trading at $7,250 after falling 5.21 percent in the last 24-hour period. The flagship cryptocurrency surged to a new all-time high late last year, when it nearly hit the $20,000 mark, but then started plummeting amid regulatory uncertainty.


Commenting on the study’s results, Chainalysis’ chief economist Philip Gradwell stated:

“This concentration of wealth mans that bitcoin is at risk of volatility, as the moves of a small number of people will have a effect (on the price).”

Philip Gradwell

The firm’s data also showed some early investors were able to sell some of their holdings to new speculators at the time the cryptocurrency was rising. Per its study, last November the amount of BTC owned by those who held it for over a year was about three times higher than the amount held by short-term investors.

By April this year, the figure changed as both long-term and short-term investors seemingly have the same amount, at 6 and 5.1 million respectively. Per Chainalysis, long-term holders sold about $30 billion worth of bitcoin to new speculators, with most of this volume being sold in December.

Gradwell added:

“This was an exceptional transfer of wealth and conditions for it to occur again are unlikely to form again soon.”

Philip Gradwell

Per the FT, experts warned that this concentration of wealth means there are opportunities for whales to engage in market manipulation due to the lack of regulations and the existence of over-the-counter (OTC) markets.

Garrick Hileman, head of research at Blockchain and the founder of a cryptocurrency market intelligence platform, noted that “these large holders communicate with each other,” and “take stock of market activity.”

As covered, a dispute between the Chicago Mercantile Exchange (CME) and various cryptocurrency exchanges saw the Commodities Futures Trading Commission (CFTC) launch a market manipulation probe in cooperation with the US Department of Justice (DOJ). Separately, the DOJ launched a criminal probe into potential bitcoin price manipulation late last month.

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