After the short six-month bear market, the BTC in 2019 has been on the rise and brought a bull run to the entire crypto market. On January 1, BTC was still hovering around $4,000, but after 177 days on June 27th, the price has rushed to about $14,000, and is now consolidating above $9,500 with a highest increase of near 256%, making it the best cryptocurrency around the world in terms of market performance this year.
But how its on-chain data reflect the same rising trend? PAData has worked with Chain.info, a one-stop data service platform for Bitcoin, to make a research on the BTC’s transaction addresses and balance distribution in the first half of 2019.
PAData Insights:
1、50% of BTC addresses have a balance less than $10, and the holding of BTC is converging towards the middle layer addresses (with a balance of 100-100000 BTC).
2、In the first half of 2019, the number of new addresses and active addresses of BTC continued to increase, and the changes of the two were in a weak positive correlation with its intraday closing price.
3、What makes the existing holders to trade is the highs and lows of the price rather than the simple daily correction.
4、While the influence between the token’s price and the network activity is basically stable, the activity driven by the price rise will further affect the price.
5、As of July 30th, the total balance of the TOP 50 addresses accounted for 11.39% of the total circulation at that time, and the concentration was lower than that of ETH and USDT in the same period.
6、78.31% of the addresses have no historical records of withdrawal.
50% addresses holding less than $10 of BTC and the change addresses may become “dead”
According to Chain.info, as of June 30, there were 25.9 million BTC addresses having balances, which was 13.42% higher than that on January 30 this year. Although there was an obvious increase in the total number of addresses, the number changes of addresses with various balances were different.
Under the thought of the Token Standard, if the balances of Bitcoin’s addresses are divided into 10 levels from 0-0.001, 0.001-0.01, 0.01-0.1, 0.1-1, 1-10, 10-100, 100-1000, 1000. -10000, 10000-100000, to 100000-1000000, it can be found that the number of the first three low-level addresses has been increased by 14.49%, 14.62% and 13.87% respectively, surpassing the overall growth in the first half of 2019. In addition, the addresses at the level of 10,000-100,000 BTC increased the most, reaching 21.28% for the first half of the year, while that of 100-1000 and 100000-1000000 BTC decreased by 0.42% and 40% respectively.
However, judging from the proportion of addresses with different balance level, the growth rate remains basically stable, and the smaller the balance, the higher the proportion is.
Among them, the number of addresses at the lowest level (0-0.001BTC) accounts for the highest that reached 50% of the total addresses as of June 30. However, even calculated at a price of $10,000, a single address balance at this level cannot exceed 10 dollars.
This may have something to do with the UTXO change mechanism in the Bitcoin network, since the system defaults to send the change of one transaction into a new address. And the number of addresses changes for various reasons. In the first half of this year, the number of addresses at this level (0-0.001) increased significantly. It can be a result of frequent transactions triggered by the rise of BTC’s price, the investors splitting their accounts, or new investors entering the makert.
These seeming change addresses may also raise the issue that if the address holders are sufficiently distributed, it is highly possible that the balances in those addresses will become "dead". The average balance of a single address at this level is about 0.00022 BTC, which is lower than the average transaction fee of 0.00053 BTC for the past ten years. And an individual cannot even cover the transaction fee if he/she does not have multiple addresses with small balances, thus leaving the balance behind forever. According to Chain.info, the addresses with the balance of 0-0.001BTC were growing in the first half of 2019 and reached a total balance of about 2810 BTC on June 30, worth approximately $30.37 million according to the closing price at that day.
The wealth has concentrated to the addresses holding millions dollars of BTC in the first half of 2019
Yet, the above-mentioned 2810 BTC only accounts for a small proportion of total circulation, which was merely 0.016% on June 30. In general, the higher the level of the address balance is, the higher the proportion of its total balance accounts for. Here are several changes in the first half of 2019 that worth noting.
In April, the total balance of the address at the level of 1000-10000 BTC accounts for the highest of the overall supply, which exceeded that of 10-100 BTC for the first time, reaching about 26.09% on April 30. And looking from the data in the first half of the year, this trend is continuing, the number of addresses with a balance of millions dollars is increasing, while that of 10-100 BTC is in a downward trend.
In addition, we can see the balance proportion of the addresses at the level of 100-1,000 BTC is in the third place, accounting for 19.29% as of June 30, but it was genearlly falling for the first half of the year. And the total balance of addresses at the level of 100,000-1,000,000 BTC also saw the same downward trends, which accounted for 2.10% as of June 30, decreasing by 1.28% compared with that on January 30. However, the total balance of addresses at 10,000-100,000 level increased in the first half of the year, accounting for 14.58% on June 30, increasing by 2.27% since January 30.
So, in the first half of the year, the total balance of the addresses holding less than 10BTC remains basically unchanged. And the concentation of BTC has a tendency to move to the middle layer (100-100000), which however, is difficult to tell whether it is caused by the increase of small holdings, the splitting from whales’ head addresses, or just more funds entering the middle layer addresses.
New addresses and active addresses continued to increase, but indicating a weak correlation with the price of BTC
The average daily new addresses of BTC increased in each month from January to May, but declined slightly in June. In January, the average daily increase of BTC address was about 305,500, while in June it was about 420,200, which increased by 31.67% in the first half, with an average monthly increase of about 5.28%.
In the first half of the year, the number of active BTC addresses continued to climb. According to statistics, the average daily active addresses in January this year was about 443,700, which climbed to about 618,200 in June, with an increase of 39.33% and an average monthly increase of 6.55%. Without counting in the number of new addresses in the first half of this year, the number of BTC’s monthly active address was increased by 56.25%, with an average monthly increase of 9.37%, which is much higher than that of the new addresses.
It indicates to a certain extent that, the existing BTC addresses were more active during the current round of BTC price rise. In turn, however, does this mean that the continued increase in the number of new and active addresses is the reason behind this round soaring of BTC price?
PAData analyzed the relationship between the number of new addresses/active addresses and the price, fluctuation and on-chain trading volume of the past week, the past three days, the past day, the next day, the next three days and the next week respectively, which showed that the on-chain trading volume in the week before and after had nothing to do with the number of new and active addresses. This may be because the real-time transactions of the users on the exchange are not reflected on-chain concurrently. The on-chain settlements happen only when the users make withdrawals, which causes the asynchronization of the trading volume on-chain from that in the secondary market.
From the dimension of the day, both the number of new addresses and that of the active addressi are slightly positively correlated with the closing price of the day, that is, the more the number of new and active addresses on the day, the higher the closing price.
By zooming out to the statistics of the week before and after the day, we can also find the relationship between the number of new/active addresses and the volatility of the price. Did this round rising attract more newcomers or activate more existing users?
Looking at the statistics of the price in the past week, past three days and past day, we found that the closing price of the past week was slightly correlated with the number of new addresses, that is, the high price of the past week had indeed attracted some newcomers, but it was not that much attractive. However, it was more attractive to existing users. The number of active addresses subtracted that of new addresses is of more significant relevancy to the price of the past week.
So, do these new and active addresses have an impact on the price of the next week? From the correlation analysis, the result is similar to the situation of the past week, which means that the effect between the price and the activity of the address is basically stable, and the activity driven by the rise in the price will further influence the price.
However, it is worth noting that the effect of the number of active addresses on the fluctuation of the price in the next week is greater than that of the price fluctuation in the past week on the number of active addresses. These activated investors are likely to affect the price fluctuation of the next week, that is, the more investors (considered to be proportional to the number of addresses) activated, the greater the volatility of the price in the next week.
78% of the big whale addresses have no withdrawal histories, the distribution of BTC is scattered
According to the statistics of Chain.info, as of July 30, the total balance of TOP 50 addresses was about 2.03 million BTC, accounting for 11.39% of BTC’s total liquidity at the time (17846612.5 BTC). According to the data of Etherscan, the total amount of TOP 50 ETH addresses account for 24.39% of ETH’s total liquidity. According to the data from Rich List|Tether, the total amount of the TOP 50 USDT addresses account for 35.39% of USDT’s total liquidity. In horizontal comparison, BTC's distribution is relatively scattered.
BTC’s big whale addresses do not exist for a relatively long duration on average. The average interval between the first and the last transaction of the TOP 10000 addresses is approximately 682.79 days, which is 1 year and 8 months. More than half of the addresses exist for about 396 days, i.e. 1 year and 1 month. Only a small number of the big whale addresses last for nearly 9 years, and the time length has nothing to do with the balance.
It was low of these big whale addresses in transaction frequency, with an average of 1 transaction occurring on chain in 123 days. And 50% of these addresses have 1 transaction on chain in 59 days averagely. There are 7739 addresses with less than 10 transactions and 694 addresses with more than 100 transactions. Moreover, the lower the big whale address ranked, the less the balance, and the lower the transaction frequency, the less active it is.
In addition to the low transaction frequency, many of these big whale addresses do not even have any withdrawal history. According to the statistics of Chain.info, as of July 30, 78.31% of the TOP 10000 addresses have no withdrawal history, but only the deposit history.
The low transaction frequency and zero withdrawal history of most big whale addresses maybe because that they are the cold wallet address of the exchanges, of which, the top four addresses are the cold wallets of Huobi, Binance, Bittrex and Bitstamp respectively. While of course, there may be other possibilities, for example, it’s possible that these big whale addresses are addresses some investors buy BTC in during the bear market. However, no further data is available to support this.
[i] 新增地址：当天0:00-24:00期间第一次发生交易行为的地址数。New addresses: The addresses that have their first transactions from 0:00 to 24:00 that day.
ii 活跃地址：当天0:00-24:00期间发生交易行为的地址数（包含第一次）。Active address: The addresses that have transactions (including the first transaction) from 0:00 to 24:00 that day.
iii 这里的活跃地址不包括新增地址。The active address here does not count the new addresses in.
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