The Sad Truth About Bitcoin Ownership

Key Insights

• The sad truth about Bitcoin ownership is that most people lack the psychological profile to hold it.
• Adam Livingston, author of The Bitcoin Age, breaks down why Bitcoin separates money from state, and the psychologically equipped from everyone else.

Supporters of Bitcoin see its ownership as a life raft from the sinking fiat ship that you want all your loved ones to be on with you.

But if you’re weary of trying to orange pill your friends and family, the sad reality is: Bitcoin isn’t for everyone.

Adam Livingston, author of The Bitcoin Age, lays this truth bare, arguing that Bitcoin isn’t just a tool, but a filter; a test of psychology, cognition, and emotional stamina that most will unfortunately fail.

Bitcoin separates not just wealth, but the very architecture of the mind. Livingston writes:

“It’s not about access, education, or financial literacy. It’s about something much darker and more permanent. Bitcoin is the Stanford Marshmallow Test for 8 billion adults. 90% are already failing.”

Beyond the Usual Barriers

Bitcoin doesn’t simply reward investment, he argues, it rewards those able and willing to pass three psychological gates:

• Abstract reasoning (grasping digital scarcity and cryptographic proofs)
• Emotional regulation (surviving repeated, soul-shaking drawdowns)
• Technical sovereignty (mastering self-custody)

Most people bounce off these gates long before ever reaching true ownership. Current data suggest that around 4% of the world’s population owns Bitcoin directly in 2025.

For full Bitcoin holders who own an entire BTC (“wholecoiners”), the population narrows to just 0.01-0.02% globally. The psychological filter is working overtime.

Bitcoin Ownership: The Mathematics of Inequality

Livingston points to well-studied correlations: higher intelligence predicts both higher earnings and greater success in holding onto risk assets like Bitcoin through market cycles.

Every IQ point adds hundreds of dollars to annual income; those same personality traits help “hodlers” weather Bitcoin’s infamous 80% price drops, while less disciplined holders panic sell at the worst times.

The result is inequality by design, not conspiracy. Bitcoin measures what you bring to it: abstract thought, emotional discipline, technical skill, and rewards accordingly. Livingston observes:

Bitcoin’s Gini coefficient, a statistical measure of inequality most commonly used to describe the distribution of income or wealth within a population, has been estimated at 0.84, more concentrated than most national economies.

Some studies suggest the coefficient has trended lower over time, but the concentration is still extreme: in 2025, the top 100 Bitcoin addresses control over 14% of the supply.

Institutions reinforce the concentration. ETFs now hold almost 6% of outstanding coins, with corporate treasuries and nation states combined controlling another 7-8%.

Altogether, more than 27% of Bitcoin’s 21 million supply is locked up by a tiny set of addresses, companies, and governments. Much of this will never return to circulation: lost wallets, long-term “cold” custody, and ETF “black holes.”

Surviving the Volatility Filter

The behavioral economics backing Livingston’s view is stark. Studies show higher-IQ individuals exhibit “lower delay discounting.”

In other words, they’re better at waiting for large future rewards, widely known as “low time preference” in Bitcoin circles, which means fewer panic sells and more disciplined accumulation.

Real data backs this up: less than 23% of Bitcoin moved in the last six months, while exchange balances remain at multi-year lows.

The active float is shrinking, meaning true Bitcoin ownership is increasingly with those who buy and don’t sell (HODLers).

Institutions are tightening the screw, Livingston argues, as ETFs accumulate coins and custodial “rent” becomes the norm.

BlackRock’s IBIT alone now manages around $75 billion in Bitcoin, and charges annual fees up to 1.5%, a perpetual tollbooth for those unable or unwilling to self-custody.

Technical Sovereignty: The Last Gate

Livingston’s last psychological gate is self-custody. The Mt. Gox disaster and countless other hacks, scams, and disasters taught millions that “not your keys, not your coins.”

Since then, hardware wallet adoption has surged, with over 5.8 million units sold in 2024, up from previous years. Self-custody is now the norm for 35% of crypto assets, compared to just 25% in 2022.

Yet mastering wallets, seed phrases, and cold storage remains a high barrier, and those who fail must pay custodial rent, sometimes forever. The real prescription? Livingston spells it out clearly:

Bitcoin ownership isn’t determined by your bank account; it’s determined by your psychological makeup.

Can you think abstractly, delay gratification, and survive 80% drawdowns? If not, Livingston concludes, “you’re renting forever.”