The Bitcoin (BTC) supply is finite and capped at 21 million BTC. This implies that no additional Bitcoin will be released after this limit has been mined. Recent Bitcoin news about institutions and whales holding large amounts of BTC has left the market wondering how it’ll affect BTC price action.
Investors would have to trade with the circulating supply, which might impact the assets’ price and provide leverage to holders of digital gold.
Bitcoin News: USA’s Role in the Bitcoin Ecosystem
Interestingly, the United States has gained leverage in the ownership of a higher percentage of the circulating Bitcoin supply. At the last count, more than 10% of the total circulating supply of Bitcoin is currently owned by the US Government and entities in America.
Beyond ownership, the U.S. is arguably one of the largest markets for Bitcoin and cryptocurrencies in general. Many BTC users reside in the U.S.
Additionally, notable crypto exchanges like Coinbase, Gemini, and Kraken are all based in the U.S. This has helped make the country a significant hub for retail and institutional participation in the Bitcoin trade.
Another major role played by the U.S. revolves around its dollar dominance in the global financial space.
Bitcoin’s price is largely quoted against the USD, which has positioned the American market as a key player in BTC’s price discovery.
Currently, America is also playing a leading role in mining Bitcoin. Some states in the U.S., such as Texas and Wyoming, have attracted Bitcoin miners due to their cost-effective energy policies.
These states also have different energy sources, some of which are renewable and have friendly regulations.
American companies such as Riot Platforms operate large-scale mining facilities in Texas and Kentucky, contributing to the global supply of Bitcoin.
Bitcoin’s Distribution Holding in the U.S.
Besides individuals and corporations, the U.S. government directly influences the supply of Bitcoin. Notably, the U.S. government has previously seized BTC from illicit activities, which is held by the U.S. Treasury.
For instance, the American Department of Justice seized 9,799.99 BTC from the Silk Road marketplace. The U.S. government’s seized Silk Road BTC, including that held by the FBI now totals 69,370.18 BTC.
Other seizures were from the Bitfinex hackers, which amounted to 12,267.02 BTC. In total, the U.S. government’s Bitcoin holdings stand at 196,784.59 BTC, which is valued at approximately $17.95 billion at the current market price.
However, despite this staggering holding, the U.S. is not the highest Bitcoin holder. The leading Bitcoin holder is the asset manager BlackRock.
The Bitcoin ETF issuer has 565,439.16 BTC, or 2.85% of the total supply, valued at $51.59 billion.
Fidelity Custody comes second with 334,538.41 BTC, or 1.69%, worth $30.52 billion.
Michael Saylor’s Strategy’s total holding of 327,447.37 BTC places it in third place, with control of 1.65% of supply. Strategy’s holding, valued at $29.88 billion, sits just ahead of Grayscale and the U.S. government.
Grayscale’s 238,439.82 BTC amounts to 1.2%, which is valued at $21.76 billion.
Does U.S. Bitcoin Concentration Threaten Decentralization?
The more than 10% holding in the U.S. from government ownership and corporations has sparked stakeholder concerns.
Some have argued that this poses a centralization risk to the asset as opposed to its decentralized principles.
However, others have argued that Bitcoin’s global distribution cancels out the huge holding in the U.S. Notably, early adopters, miners in Kazakhstan and Russia, and users in developing countries also have sizable stakes.
Experts insist that Bitcoin’s global node network and fixed rules will act as a “safety measure” to prevent the fallout from any centralization threat.
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