Record High Number of Bitcoin Addresses With Non-Zero Balance
• The number of Bitcoin wallet addresses holding a non-zero balance of BTC hit a new record high this week.
• This surge was triggered by optimism for a better macro backdrop in 2023 and signs that the Bitcoin bear market is over.
• The majority of the new wallets are those holding less than 1 BTC, suggesting small investors are driving the growth.
FTX Collapse Triggers Shift to Crypto Self-Custody
In November 2022, the collapse of one of largest cryptocurrency exchanges in the world FTX resulted in customers losing access to billions in funds. Investors rushed to get their Bitcoin off exchanges, triggering a surge in address numbers at the time.
However, capitulation as Bitcoin’s price fell to fresh 2022 lows caused many wallets to get rid of all their Bitcoin, leading to an equally swift pullback in non-zero address numbers.
January Price Surge Entices New Investors Back into Market
It has taken a roughly 40% surge in Bitcoin’s price since the start of 2023 amid increased on-chain and technical signs that the bear market is over to entice enough new investors back into the market and drive up wallet address counts back to a record high.
Rotation In Ownership Away from Larger Investors
Data from Glassnode on BTC wallet address cohorts reveals that this most recent surge was led by wallets holding small amounts (<1BTC). At the same time, there has been no significant change in numbers for Crab, Fish and Shark wallets (holding 1-10; 10-1K; >1K respectively), indicating no significant shift towards larger investors yet.
Conclusion
The rise in non-zero wallet address numbers suggests that small investors are driving this growth as they return to take advantage of improved macroeconomic conditions and bullish sentiment surrounding Bitcoin’s future prospects