By Frank Chaparro
Is bitcoin just another toy for the 1%?
It’s a question analysts at Switzerland-based bank Credit Suisse explored in a big note on cryptocurrencies and blockchain sent out to clients on Thursday.
“The concentration of wealth at a small group of addresses – be it individuals or exchanges –means that a few key players in the game can have a massive influence on the bitcoin market,” the bank said.
Those “hodlers,” as they’re referred to in the crypto world, are holding onto their bitcoin for dear life. As such, wealth in the ecosystem has become very concentrated.
97% of all bitcoin are held by 4% of all bitcoin addresses, according to the bank.
By way of comparison, the wealthiest 1% own just about half of the world’s wealth, according to analysis by Credit Suisse in November.
The bank said the wealth concentration points to bitcoin’s use-case as a store of value, akin to gold.
“Significant proportions of bitcoin and other cryptocurrencies are apparently being held like precious assets, thereby severely restricting the flow and availability of the digital currencies,” bank said.
2017 was a breakneck year for bitcoin investors. The red-hot cryptocurrency soared to an all-time high near $20,000 in December. It ended the year up 1,300%.
As for bitcoin’s market capitalization, it soared from $15.6 billion at the start of 2017 to an all-time high above $320 billion in December, according to data from CoinMarketCap.com.by