Bitcoin ‘Millionaire’ wallets are going down: Is it a thing to worry about?

As the number of Bitcoin millionaires dropped by 80% annually, they are becoming an increasingly rare breed. There are currently just 23,000 BTC wallets with a balance worth $1 million or more, according to the most recent data from on-chain analytics company Glassnode.

There were 23,245 BTC wallets with a balance of more than $1 million as of 25 November, according to Glassnode. Compare that to the situation on 8 November 2021, when there were 112,898 ‘Millionaire’ wallets. The total reached its pinnacle as BTC/USD approached its most recent $69,000 all-time high.

On the other hand, a recent survey of institutional investors by the business-to-business publisher Institutional Investor’s Custom Research Lab revealed that, despite the difficulties of the larger market, 62% of those who were invested in cryptocurrencies increased their allocations over the past 12 months.

Why are Bitcoin ‘Millionaire’ wallets suffering?

According to data from TradingView, the number of millionaire wallets decreased by almost 79% over the last year, while the greatest drawdown for BTC/USD this month was 77%.

Additionally, as co-founders of the trading platform Decentrader pointed out last week, the huge rise in wallets holding one BTC or more is probably due to exchange customers consolidating their wallets and withdrawing cash to private storage. These reached over 952,000 as of 27 November, setting a new record for Bitcoin.

However, Glassnode demonstrated that even the tiniest classes of investors—those with 0.01 BTC or more in their wallets—have seen a significant increase in numbers.

But if we’re talking about institutional investments, the news is different. According to a poll, 12% of participants said they had reduced their exposure to cryptocurrencies during the previous year, indicating that institutional investors are still optimistic about the long-term prospects of digital assets.

59% of investors said they are now employing or intend to utilize a buy-and-hold strategy, and 58% said they anticipate raising their allocations over the next three years.

72% of institutions still believe that digital assets are here to stay, reflecting their overall optimistic attitude toward the asset class. However, the majority (54%) predict that the market will remain range-bound for the upcoming year, while 12% predict a downward trend.

What to expect?

Long-term Bitcoin investors have increased their selling recently (according to on-chain data) which could cause the price of the cryptocurrency to further decline. The price of Bitcoin, at press time, was hovering around $16.4k, having dropped 2% during the previous week. The value of the cryptocurrency dropped 15% in the last month.