The way Bitcoin is held has changed dramatically over the past few years. Once concentrated on trading platforms, a growing share of BTC is now stored in private wallets, corporate treasuries, and government reserves. Exchange balances have fallen to their lowest levels since 2018, with only about 14.5% of the total supply remaining on these platforms. Meanwhile, spot Bitcoin ETFs, introduced in early 2024, now hold over 1.4 million BTC, changing institutional participation.
Exchange reserves have steadily decreased, suggesting fewer Bitcoins are available for quick trades. Some experts believe this could lead to higher price volatility, as fewer coins in circulation make the market more sensitive to large buy or sell orders. The drop in exchange-held BTC also aligns with growing institutional interest in long-term holding.
The shift away from exchanges is not sudden but part of a multi-year trend. Since 2020, large investors and institutions have increasingly preferred self-custody solutions over keeping assets on trading platforms. Security concerns, regulatory scrutiny, and the desire for long-term asset preservation have all contributed to this movement.
Private Wallets and Whales Control Majority of Bitcoin
Most Bitcoin is now held outside exchanges, primarily in private wallets. The top 1,000 addresses alone hold over 3 million BTC, roughly 15% of the total supply. These wallets belong to early adopters, institutional investors, and high-net-worth individuals. Among them is Bitcoin’s mysterious creator, Satoshi Nakamoto, whose estimated 1.1 million BTC has remained untouched since the network’s launch.
Public and private companies have also accumulated large amounts. Corporate treasuries hold about 856,000 BTC, with firms like MicroStrategy and Tesla leading the way. Governments, including the U.S. and China, control another 529,705 BTC, often seized from criminal cases or acquired as reserves. Private businesses hold an additional 421,641 BTC, further reducing liquid supply.
Combined, these holdings suggest that nearly 72–75% of Bitcoin is now in long-term storage. Unlike exchange-held coins, these are unlikely to be sold quickly, reinforcing Bitcoin’s reputation as “digital gold”. The trend reflects growing confidence in BTC as a store of value rather than just a trading asset.
Bitcoin ETFs Now Hold Over 1.4 Million BTC
The introduction of spot Bitcoin ETFs in January 2024 opened new avenues for institutional investment. These funds now hold more than 1.42 million BTC, accounting for nearly 7% of the total supply. BlackRock’s iShares Bitcoin Trust (IBIT) alone holds 696,400 BTC, making it the largest ETF in the space. Fidelity’s Wise Origin Bitcoin Fund (FBTC) follows closely, with billions in assets under management.
ETFs have attracted significant capital, with net inflows surpassing $48.60 billion as of June 1. U.S.-listed products now manage around $131.30 billion in assets, demonstrating strong demand from both retail and institutional investors. Unlike direct Bitcoin purchases, ETFs offer a regulated and familiar investment vehicle, appealing to traditional finance participants.
The rapid growth of Bitcoin ETFs has also impacted exchange reserves. As more investors buy through these funds, fewer coins remain on trading platforms. ETFs are accelerating the shift toward long-term holding, as institutions use them for strategic portfolio allocations rather than short-term trading.
What May Shift Next
The decline in exchange reserves is one of the most notable trends. With only 14.5% of Bitcoin left on trading platforms, the liquid supply is shrinking. This could lead to sharper price movements, especially during periods of high demand. The trend also suggests that long-term holders are becoming the dominant force in the market.
Another shift is the rise of institutional participation through ETFs. These funds have quickly amassed large holdings, providing a bridge between traditional finance and cryptocurrency. Their growth indicates increasing acceptance of Bitcoin as a legitimate asset class. However, concentration remains a concern – a small number of wallets control a significant portion of the supply.
Looking ahead, further ETF expansion and regulatory developments could shape Bitcoin’s ownership landscape. New products, including crypto basket ETFs, are in development, potentially attracting even more institutional capital. Meanwhile, as more Bitcoin moves into long-term storage, its scarcity could become an even bigger factor in price dynamics.
