Today there are 18,244,475 BTC in circulation and during the last few weeks, a number of bitcoin influencers have been talking about how much is needed to be included in Bitcoin’s top 1% of holders. For instance, according to Blockworks Group analyst Jake Levison, if you own 0.28 BTC “you’re statistically guaranteed to be in the richest 1% of the world in BTC terms.” Regardless of the amount of BTC required to qualify as a one-percenter, it’s a debate that has raged on for years.
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Members Only: Is 0.28 BTC All It Takes to Make the Bitcoin 1%?
On February 18, Blockworks Group analyst Jake Levison tweeted about what it takes to make it into the top 1% of bitcoin holders worldwide. “If you own 0.28 BTC, you’re statistically guaranteed to be in the richest 1% of the world in BTC terms,” explained Levison. Despite the fact that the tweet received 1.5K likes, not everyone agreed with Levison’s estimate. “Maybe earlier, in 2030, average holdings are only 0.01 BTC, assuming 1 billion using the network,” Twitter user @Haggsboson replied. The 2030 assumption came from the recent study written by Unchained Capital’s Parker Lewis called “Bitcoin Obsoletes All Other Money.” Levison’s opinion is not really new either as others have assumed that 0.28 BTC gets you into the richest 1% of bitcoin owners.
Former Google Product Director Steve Lee said the same thing in October 2018. “If you own 0.28 BTC and HODL, you can be certain no more than 1% of the current world’s population can ever own more BTC than you. A modest investment of $1,830 today can ensure you are a 1%er in a future Bitcoin world,” Lee tweeted. Not too many people disagreed with Lee’s statement in 2018 but one replied: “That’s true but you have to factor in that not all wealth will be in BTC. You might be in the 1% top BTC balances but not in the top 1% wealth.” So the average bitcoiner in the eyes of some holds around 0.01 BTC and a few people agree that 0.28 BTC gets you into the Bitcoin 1% club.
An illustrative view of the “average bitcoin per user” from the recent study written by Unchained Capital’s Parker Lewis.
15 BTC to Join the Club: Modeling Bitcoin Distribution by Disregarding Analyzed Wallets and Addresses
But even these two estimates from Lee and Levison might be too low, as research suggests that 15 BTC is the minimum needed to join BTC’s 1%. A chart published in 2017 estimates that the top 1% of bitcoin holders need at least 15 BTC and 89 BTC to make the top 0.1%. According to the Blocklink.info chart, there are 225,000 people within the top 1% percentile. A similar study was published by Bambouclub on September 9, 2017, and both reports leverage a new model of BTC distribution. Bambouclub and the Blocklink.info studies model BTC’s distribution using a scheme that “disregards wallet and address data entirely.” The model’s assumptions include:
- Power law applies to distribution of bitcoin wealth.
- Distribution of bitcoin wealth exactly mirrors that of global wealth.
- 25 million bitcoin owners.
- No lost bitcoins.
A study published by Bambouclub on September 9, 2017. This chart shows you need more than 0.28 BTC to make the 1% club as Blocklink.info chart shows it takes 15 BTC to make the Bitcoin 1%. It takes over 7,000 BTC to make the 0.001% of the wealthiest bitcoin holders.
In order to make the 0.01%, Blocklink.info’s chart shows you need 433 BTC and to make the highest order of bitcoin holders (0.001%), you would need 7,021 BTC. The study assumes only 500 people are in the 0.01% and just 250 people are in the 0.001% in 2017. However, it’s hard to get more accurate estimates in regard to the wealthiest bitcoiners because no one truly knows the number of people worldwide who own even a small fraction of BTC. Moreover, there’s a great number of lost bitcoins and in January 2020 it was estimated that more than 10 million BTC have been sitting dormant for a whole year. The 10.7 million BTC lost is part of the largest number of coins that haven’t moved since the spring months of 2017.
This image from Unchained Capital’s research on April 17, 2018, shows UTXO age distribution with price peaks labeled. The white lines are ‘Hodl Waves’ which starts a new aging period. On January 13, 2020, news.Bitcoin.com reported on how close to 11 million BTC hasn’t moved in over a year.
From Lost Bitcoins to the Number of True Owners, Bitcoin’s Adoption Metrics Have a Few Unknowns
The number of BTC needed to get into the top 1% is roughly between 0.28 BTC to 15 BTC depending on the person you ask or the study referenced to get that calculation. Steve Lee’s 2018 estimate assumes that there will only be 21 million bitcoins and this is divided by 0.28 and then again divided by the number of people living on earth, which is 7.7 billion people as of April 2019. Jake Levison backed up his statement when someone asked him when 0.28 BTC will get you into BTC’s 1% club. “From now until the end of time,” Levison tweeted. The Blockworks Group analyst added:
My tweet was saying that if you own 0.28 BTC, only 1% of the world will ever be able to own more than you. Hence putting you in the top 1%.
There will never be more than 21 million bitcoin issued. Many speculators over the years have tried to guess what it takes to make the bitcoin one-percenters club. Estimates vary because of uncertainties like the number of bitcoin owners globally.
The answer to the BTC 1% club question is quite debatable and there are a few different calculations. The reason for this is the number of unknowns that cannot be calculated in a precise fashion such as the exact number of BTC holders, the approximate number of lost and stolen coins, and the number of wallets worldwide. Moreover, there’s a lot of skewed data online that attempts to estimate the number of bitcoin owners in different countries and worldwide. For instance, according to a survey and research report written by Spencer Bogart of the venture capital firm Blockchain Capital, “9% of the [American] population owns bitcoin.”
A report published on January 7, 2020, by the digital currency company Decentralised.co which shows the number of BTC addresses has increased year after year. However, Bambouclub’s study on September 9, 2017, notes that “models of the distribution of bitcoin wealth that analyze wallets and address data will always fail.”
“Including 18% of those aged 18–34 and 12% of those aged 35–44,” Bogart wrote on April 30, 2019. However, a big discrepancy with Bogart’s estimate is the fact that the study only surveyed 2,052 American adults rather than the 209 million adults who are currently 18 years of age and over. We can try to come close to answering the speculative 1% question, but just like measuring the world’s richest gold holders, we can only guess the number of BTC held by individuals worldwide.
What do you think about the estimates for making it into the BTC 1% club? Do you think it’s 0.28 BTC or more than that like the 15 BTC estimate from Blocklink.info’s report? Let us know what you think about this subject in the comments section below.
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