Institution controls 12.5% of Bitcoin? Bitwise: This "wealth transfer" is just the beginning.

Author: Bitwise

Translation: Golden Finance xiaozou

If in doubt, please extend the time frame for observation.

This is the essence of the key charts in our latest Bitwise quarterly market report.

The data clearly reveals the current general trends and even explains the uniqueness of this round of Bitcoin cycle (data provided by River).

1. Interpreting the Essence of “Wealth Transfer”

The key point is that Bitcoin is transitioning from early retail investors to institutional investors (funds/ETF products), corporations, and even government entities.

Unlike other traditional asset classes in history, the adoption path of Bitcoin began with retail investors such as cypherpunks and early participants, followed by the initial positioning of institutional investors like family offices, fund managers, and ETFs.

Even today, retail investors still account for about 66%, which means that the vast majority of Bitcoin is still controlled by non-institutional investors (see the matrix distribution in the above image)! In comparison, the latest data from the U.S. 13F filings shows that the allocation ratio of institutional investors in traditional asset classes is significantly higher.

Observe the proportion of institutional holdings in mainstream traditional financial ETFs:

• iShares 20+ Year Treasury Bond ETF (TLT) institutional ownership 79%;
• SPDR S&P 500 ETF (SPY) institutional ownership 58%;
• SPDR Gold ETF (GLD) institutional holdings 36%.

Latest survey by Bank of America Global Fund Managers: the average allocation ratio of crypto assets (including Bitcoin and other tokens) is only 0.4%. (Supplement: the institutional holding ratio of IBIT is currently only 26%…)

As we can see, as the industry often says, “we are still in the early stages,” institutional adoption is still in its infancy.

But it cannot be denied that a massive wealth transfer from retail investors to institutions is taking place. The migration of wealth from early coin-holding retail investors to institutional investors will have multiple impacts, the extent of which may exceed imagination:

2. Bitcoin Popularization: Trends and Cyclical Patterns

(1) Trend

First, let's be clear: this kind of transition will not happen overnight, but is a long-term trend.

The reality is that most Bitcoin is in a non-liquid state and is being held long-term. Only about 14.5% of the Bitcoin supply is held on exchanges with relative liquidity, such as Coinbase or Binance, while the remaining assets are stored in off-chain wallets, maintaining a non-liquid state.

Without economic incentives, the wealth of Bitcoin will not automatically transfer.

Many early holders set psychological price levels (such as 1 million USD/BTC) or economic targets (such as “funds for buying a house”) as triggers for selling Bitcoin, which is far higher than the current market price of about 115,000 USD. To attract these non-action tokens into the market (i.e., exchanges), the price of Bitcoin needs to rise significantly.

In this process, as ETFs hold assets for millions of individual investors in trust form, the popularity of Bitcoin will expand. Public company financial reports also indicate that it is being held by hundreds of thousands of different investors. As of the writing of this article, institutional investors (ETPs and public companies) have controlled approximately 12.5% of the Bitcoin supply – and this is still rapidly increasing.

(2) Cyclical Patterns

Most analysts may agree that the early Bitcoin bull and bear cycles were primarily dominated by the halving events that occur every 210,000 blocks (approximately every 4 years), a mechanism that reduces the Bitcoin output by half.

However, the impact of halving events is diminishing with each occurrence—whether in absolute terms or relative to the circulating supply. With the increase in institutional adoption and changes in demand structure, the halving effect has clearly weakened.

Data from 2025 shows that institutional demand has reached about 7 times the supply gap caused by the halving!

During this process, the influence of traditional macro cycles has relatively strengthened – Bitcoin has become a true “macro asset.”

Our quantitative analysis also shows that over 80% of the fluctuations in Bitcoin prices over the past 6 months have been driven by macro factors such as global growth expectations and monetary policy, with the influence of token-specific factors being less than 5%.

However, the dominance of macro factors also means that the future bull and bear cycles of Bitcoin will fluctuate in sync with macro/business cycles, and the four-year cycle driven by “halving” is very likely to “fail.”

This ultimately indicates that the accumulation and distribution of Bitcoin will depend on the dominant macro environment (expansion/prosperity vs contraction/recession), thereby triggering short-term price fluctuations in a risk appetite/risk aversion pattern.

3. Conclusion

The fundamental meaning of “wealth transfer” is that the price of Bitcoin needs to reach a higher level—far above the current level—to incentivize further adoption and complete the transition from early retail investors to institutional investors.

The continuous influx of institutional investors signifies that Bitcoin has become a true “macro asset,” indicating that future bull and bear cycles will increasingly be dominated by macro/business cycles (rather than halving events).

*** (The above content is excerpted and reproduced with the authorization of the partner PANews, original link | Source: Golden Finance) ***

Disclaimer: This article is for market information only. All content and opinions are for reference only and do not constitute investment advice, nor do they represent the views and positions of the blockchain community. Investors should make their own decisions and trades, and the author and the blockchain community will not bear any responsibility for any direct or indirect losses incurred by investors' trades.