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Whales buy dip, miners go off-risk, BTC millionaires shrink

There were only 25,390 wallets with more than $1 million in Bitcoin as of June 29, 2022. This represents a 72 percent drop in just six months.

Bitcoin has had a difficult last six months. The world's largest cryptocurrency has dropped more than 70% since its all-time high in November 2021 and is now trading at $19,462. Its market capitalisation has also fallen, from $880 billion at the start of the year to $373 billion at the time of writing.

This drop in valuation has had far-reaching consequences for the cryptocurrency market. For example, the number of Bitcoin millionaires has decreased dramatically this year. On January 5, 2022, there were 90,902 Bitcoin millionaires, according to the data archiving tool Wayback Machine.

However, there were only 25,390 wallets with more than $1 million in Bitcoin as of June 29, 2022. This represents a 72 percent drop in just six months. Things appear to be getting worse, given that there will be 116,139 Bitcoin millionaires by the end of October 2021.

However, as Bitcoin prices continue to fall to new lows, whales have seized the opportunity to go on a buying spree. Spot whales (wallets with more than 1,000 BTC) made significant additions to their Bitcoin portfolios in June 2022, according to Glassnode data. Current prices are in or near the December 2020 range, allowing whales to invest conservatively and reduce their average purchase price.

Whales are the most powerful players in the fragmented crypto market. They are market veterans who can weather the cryptocurrency storm by simply purchasing more Bitcoin. These large investors have been adding coins to their stockpile at an astonishing rate of 140,000 BTC per month, and now control a total of 8.69 million BTC. This equates to 45.6 percent of the available supply.

Whales are now very close to owning 50% of total supply, and experts are concerned that this will happen before the crypto winter ends. This is not a good sign for investors because whales will take control of the market, influencing prices at every stage.

Variety of Addresses in Loss. Supply: Glassnode
Variety of Addresses in Loss. Supply: Glassnode

Crabs (wallets holding 0.1 to 10 BTC) and shrimps (wallets holding up to 1 BTC) have been scooping up Bitcoin at every opportunity. According to Glassnode data, crabs are purchasing Bitcoin at the fastest rate since 2017.

However, miners have a different story to tell. For them, rising energy costs and decreased profitability in mining operations have complicated matters further. Glassnode released the "Bitcoin Puel Multiple Chart" in June 2022, which evaluates Bitcoin mining profitability.

The chart showed that profitability had dropped to its lowest level since November 2018, surpassing the lows seen during COVID-19 and the Chinese crackdown on cryptocurrencies.

Furthermore, falling Bitcoin prices have reduced the value of their hard-earned rewards, calling the viability of their business into question. Miners currently own approximately 65,200 BTC collectively. Fearing further price decapitation, miners offload 3,000 to 4,000 BTC on the open market each month.

While experts and chart patterns can provide insight into where Bitcoin prices may go from here, no one can be certain. We can only wait and watch.

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