Bitcoin, the world’s first decentralized digital currency, has been steadily gaining popularity and acceptance since its inception in 2009. It is a decentralized currency, which means it is not controlled by any government or financial institution. As a result, it has become a popular investment option for individuals and institutions alike. In recent years, the ownership of bitcoin has shifted from being predominantly owned by individuals to being owned by institutions. In this article, we will explore what percentage of bitcoin is owned by institutions.
Institutional investors are defined as organizations that manage large sums of money, such as hedge funds, pension funds, and investment banks. These organizations typically have a lot of capital to invest and are looking for investments that can provide high returns. Bitcoin has caught the attention of institutional investors due to its potential for high returns and its ability to act as a hedge against inflation.
According to a report by digital asset manager CoinShares, institutional investors have been buying more bitcoin than ever before in 2021, with inflows reaching a record $4.5 billion in the first quarter of the year. This is a significant increase from the previous quarter, which saw inflows of $3.9 billion. The report also noted that institutional investors now own around 6% of the total bitcoin supply.
The report further reveals that the majority of institutional investment in bitcoin has come from North America, with 83% of inflows coming from the region. Europe accounted for 7% of inflows, while the rest of the world accounted for 10%. This is not surprising, given that North America has a more developed financial system and a higher level of institutional investment.
Another report by cryptocurrency exchange Kraken states that the percentage of bitcoin owned by institutions is even higher, at around 10%. The report notes that this figure has been steadily increasing over the past few years, with institutional ownership of bitcoin growing by 212% in 2020 alone.
The report also states that the majority of institutional investors are buying bitcoin as a hedge against inflation and as a store of value. The ongoing COVID-19 pandemic has led to unprecedented levels of government intervention in financial markets, which has led to concerns about inflation. Bitcoin, with its limited supply and decentralized nature, is seen as a potential hedge against inflation.
In conclusion, the percentage of bitcoin owned by institutions is currently estimated to be between 6% and 10%. This figure is expected to continue to grow as more institutional investors start to see the potential benefits of investing in bitcoin. As the world becomes more digital and decentralized, it is likely that bitcoin will become an increasingly popular asset class for institutions looking to diversify their portfolios and hedge against inflation.