The Express reported that figures from Chainalysis, a well-known cryptocurrency analysis firm, show that over one-third of all Bitcoin is in only 1,600 wallets.

1,600 Wallets Hold Over 1/3 of All Bitcoin

This issue has been no secret in the cryptocurrency community, with small investors in the space continually dubbing these wallets as ‘whales.’ The aforementioned 1,600 wallets all have more than 1,000 Bitcoin each, with 100 of these wallets containing over 10,000 Bitcoin, reports the Express.

At current market prices, 10,000 Bitcoins clocks in at a staggering $75 million U.S., which is by no means a figure to scoff at.

Chainalysis chief economist Phillip Gladwell specifically stated:

“This concentration of wealth means that bitcoin is at risk of volatility as the moves of a small number of people will have a large price effect.”

This has become a valid worry, with the trustee of the Mt.Gox exchange dumping thousands of Bitcoin on public exchanges, further fueling Bitcoin’s short-term bearish trend.

Despite these fears, further analysis has shown that some of these ‘whales’ have not moved their Bitcoin in years, leading some to believe that a few of these wallets are owned by particularly unlucky individuals who have lost access to these Bitcoin. Others also suspect that Satoshi suffered the same fate, with his, her, or their wallets collectively holding over one million of potentially lost Bitcoin.

In addition, according to an analysis done by the Chainalysis, the amount of Bitcoin held by long-term holders has been decreasing, relative to the amount of Bitcoin held by short-term holders. This means that there has been a shift in power dynamic, with the market movement power of short-term speculators growing.

Despite some the presence of a belief that this is a promising sign, there is worry that short-term speculators are only here to play with the price of Bitcoin.

Bitcoin Is Not the Only Blockchain Experiencing This Problem

Skeptics of the decentralized nature of cryptocurrencies have begun to criticize a variety of different projects for having a similar condition, with top wallets holding large majorities of cryptocurrency wealth.

According to an analysis done by Reddit users, the top 10 EOS wallets hold almost half of all EOS coins, 496,735,539 to be more specific.

However, it is important to note that some of these addresses are most likely exchanges, reducing the risk of a centralization issue. However, further analysis found that the top 75 EOS holders own at least $10 million worth of EOS coins, clocking in at 646,595, with a low-chance that these are all exchanges.

This has become the topic of controversy with many in the cryptocurrency community, with some critics stating that Block.one’s attempts to mitigate this form of centralization were not effective. It is still unclear how far this issue extends in the case of EOS, but we will soon see with yesterday’s opening of the mainnet.

Popular altcoin, Litecoin, has also had problems with this issue, with the top 400 wallets containing just over 50% of all coins in circulation.

However, many analysts believe that when adoption in this industry grows, that all cryptocurrencies will begin to spread thin across an ever-growing number of wallets. But until that happens, many will still worry about these so-called ‘whales’ manipulating the market, dragging prices to where these whales want them to be.

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