Who is ‘Smartmoney’ and how do they influence the crypto market?

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55.67% of the total Bitcoin emission is concentrated in the hands of professional market participants. They play an important role in shaping the mood of crypto market participants.

The BDC Consulting team has studied the full list of the largest Bitcoin holders and found out how they affect the price of the first cryptocurrency.


Contents:

The distribution of wallets holding large sums of Bitcoin

Classification of major stakeholders

Conclusions

One of the methods for analyzing the cryptocurrency market and potential trends in price changes for retail investors is the analysis of the information field. We’ve heard about the numerous tweets by Elon Musk, who is accused of intentionally changing cryptocurrency prices through his messages. But BDC Consulting conducted a study of the largest Bitcoin holders who collectively own 55.67% of the total BTC supply. They are sometimes called ‘Smartmoney’. By constantly screening their social networks and opinions, you can get multilateral information.

After researching open sources and regulators' reports, we have identified the main market players who can influence it due to the volume of the available cryptocurrency.


The distribution of wallets holding large sums of Bitcoin

To analyze Bitcoin, in particular news about it, many retail investors use information from rating agencies, as well as social networks of opinion leaders and public figures (Elon Musk, Michael Saylor, and others). In order to understand which information will be more important, you need to analyze the opinions of large Bitcoin stakeholders.

Table 1: Bitcoin distribution over network’s addresses


The table above shows the number of addresses with different balances. We are most interested in addresses with large sums (from 1,000 BTC).

Visually, the distribution of such addresses is shown in the figure below:



The diagram allows us to conclude that there are large stakeholders who collectively own 55.67% of the total BTC emission (so-called ‘Smartmoney’).


Classification of major stakeholders

As of August 13, 2021, only 18,784,793 BTC were mined out of the total issue of 21,000,000 BTC. According to Chainanalysis Inc, 20% of the Bitcoin issue is lost - this 4.2 million BTC should be taken into account when accounting for the main holders.

After conducting research work on open-source tax authorities, we have highlighted the distribution of the main holders of BTC.

Table 2: Distribution of Bitcoin emission


Currently, Bitcoin emission is distributed so that the key volumes are held by miners, exchanges, private and public stakeholders with a large community in social networks, which allows them to influence the price change (the full list of ‘Smartmoney’ is available via the link). It should be noted that sometimes their opinions differ, which is why the analysis of the information from all the companies and persons presented in the table will help to form a balanced assessment of potential changes and trends.


Conclusions

  • The total emission of Bitcoin is held by professional market participants - CEOs of companies or exchanges, or investors whose opinion matters for the crypto community.
  • Bitcoin emission is distributed so that the key volumes are held by miners, exchanges, and influencers who manipulate the price of the main cryptocurrency through a large community on social networks.

It is worth noting that influencers’ tweets do not move the price by themselves, as the latter is defined by multiple factors. However, they can change the mood of investors who start conducting transactions and influence the price of the cryptocurrency. Therefore, it is important to follow the actions of ‘Smartmoney’ - it helps to form the general background and the global trend of Bitcoin.