Bitcoin Market Oligopoly Still Severe... 1,000 Individuals Control 16% of Total

[Photo by AFP Yonhap News]

[Asia Economy Reporter Park Byung-hee] As Bitcoin prices continue to break all-time highs day after day, an analysis has emerged that the Bitcoin market is still oligopolized by a small number of investors. There are concerns that major players could collude to manipulate Bitcoin prices.

Bloomberg, citing a report from the National Bureau of Economic Research (NBER), reported on the 25th (local time) that the top 10,000 individual investors control about one-third of the circulating Bitcoins.

NBER specifically identified that the top 1,000 individual investors hold approximately 3 million Bitcoins. The current number of circulating Bitcoins is known to be about 18.8 million. This means that 1,000 people control about 16% of all circulating Bitcoins.

The issue of oligopoly in the Bitcoin market has been raised since the market was first formed. It is not easy to accurately determine how concentrated the Bitcoin market is because ownership is not clearly revealed, such as exchanges holding Bitcoins on behalf of individuals.

NBER estimated that intermediaries control about 5.5 million Bitcoins, while individual investors control about 8.5 million.

NBER pointed out that the owners of accounts holding large amounts of Bitcoin could be the same, suggesting that the degree of oligopoly in the Bitcoin market could be much more severe in reality.

The oligopoly problem is even more serious in the Bitcoin mining market. NBER estimated that 50 companies, accounting for only 0.1% of all mining firms, control 50% of the total mining capacity. Additionally, the top 10% of mining companies control 90% of the total mining capacity.

In its report, NBER stated, "Despite Bitcoin receiving significant attention over the past few years, the Bitcoin ecosystem is still dominated by a small number of major players," adding, "This exposes Bitcoin to systemic risks." NBER also noted that although Bitcoin prices have risen sharply recently due to institutional adoption, the benefits of price increases could be concentrated among a few due to oligopoly.

The recent approval by the U.S. Securities and Exchange Commission (SEC) of the first Bitcoin exchange-traded fund (ETF) listing caused Bitcoin prices to surge. While Bitcoin prices hovered in the low $40,000 range at the end of last month, the launch of the U.S. ETF triggered a rally that broke all-time highs day after day, reaching the $65,000 level. However, it still shows extreme volatility, having dropped more than 10% from the previous day's peak to below $60,000.

This content was produced with the assistance of AI translation services.