No, no one ever really owns too many Bitcoins. But the question does come up more and more often. Especially as we see Microstrategy and its founder Micheal Saylor acquire more and more of the total Bitcoin supply. However, it might be strange to see 1 company own more than 1% of the total supply of money (Bitcoins). It does not have to forsake the number 1 cryptocurrency. Just like this currently is with fiat money. Where the amount of money someone else has doesn't directly influence the amount anyone else has. As long as there is no crazy amount of inflation.
Can someone own too many Bitcoins?
People often say money is power. And it is, in most cases. However, when it comes to Bitcoin, having more Bitcoins does not mean you have more power over the network. Not because all those Bitcoins aren't worth a lot. But rather because the control over the Bitcoin network is comprised of the node operators, miners, and indirectly also a bit because of the coin holders.
You see each part of the network has its own incentive to keep the network functioning as best as possible. Miners want to have the network functioning at its best because this creates the most revenue for them. But also because they are paid out in BTC which receives its value from a healthy and functioning network. Although node operators are not incentivized by any form of money. They do uphold the network as a service to which in return they get more privacy and self-sovereignty. But also Bitcoin node operators could earn some Sats by turning their node into a Lightning node.
At last the influence that coin owners hold over the network is only that as to where they spend their coins on. Meaning that if you have a lot of coins you can try to use that money to influence the miners and nodes in a way you find best. But you can not force any rules upon the network, just by holding a lot of coins.
Does Microstrategy’s Bitcoin holding make the network at more risk?
A lot of crypto networks that use Proof Of Stake (POS) blockchains, could be at risk of extreme centralization if 1 party acquires a large portion of all tokens. So if Microstrategy was trying to accumulate Ether this could potentially impact the decentralization of the network. But as Microstrategy is not stacking any other coins than BTC, this won't be an issue. Because like mentioned before, having more BTC does not necessarily mean that you have more power over the network. Nodes and miners do not have to listen to the holder with the most tokens. And having more coins only means that you have more money to spend.
Some people however do not feel comfortable with the fact that Microstrategy is holding already as many coins as they have. Because of the fact that they do hold some influence over the price. In theory, MicroStrategy could dump all their coin on the market. Causing a massive selloff and decline in the price. This would only come at the cost of themselves. But still, in the short term, it creates a small risk.
But besides people feel uncomfortable with the risk of Microstrategy dumping the market. Many also feel like they should not hold this large a share of the total future money of the internet’s supply. Just like many people think no one person should be so rich that they have more than the bottom 95% of society.
How much of the total Bitcoin supply does MicroStrategy own?
MicroStrategy has been accumulating Bitcoin since 08/11/2020. Since then they purchased Bitcoin many times. For the sake of the future we won't all post here, but you can find their purchases here.
As of the 4th of May, 2023 MicroStrategy held 140,000 BTC, which is 0.66% of the total supply. But because MicroStrategy plans on acquiring much more over time we can expect this share to grow. But decline in speed as the price of Bitcoin becomes more and more expensive.
Because MicroStrategy simply believes that Bitcoin is the future of money, they will keep accumulating as much as possible. However, this won't affect Bitcoin at all in the long run. It will just create an entity that will potentially be very rich in the future. What they will do with these riches? We will see.
Is Microstrategy the largest Bitcoin owner?
No, they are not. Although MicroStrategy has a lot of Bitcoin. They are not the largest Bitcoin holder in the world. And they probably never will be. Simply because Bitcoin’s original creator, Satoshi Nakamoto is said to have more than 1 million Bitcoin. Making it almost impossible to get to the same number of coins.
But even besides Nakamoto, MicroStrategy at the current time is still not the largest owner. Mostly because of large exchanges that still hold a significant amount of Bitcoin.
Looking at the future, however, it could be possible that at some point MicroStrategy becomes the biggest holder (besides Nakamoto). As exchange reserves get lower and MicroStrategy keeps on buying.
Other large Bitcoin owners
The other large BTC owners that hold a super whale amount of BTC are some exchanges like Binance and Bitfinex. But also many other large exchanges.
This balance changes over time tho, especially as some exchanges gain popularity and others lose it. But besides these large custodians, some companies also hold BTC on their balance sheets. These are some of them:
- Galaxy Digital Holdings
- Voyager Digital Ltd.
- Tesla
- Marathon Digital Holdings Inc.
But of course next to entities that have publicly declared their holdings there are still some anonymous addresses that hold large amounts as well. With the number 1 being an anonymous account that holds more than 140,000 BTC.
What will become of Microstrategy when Bitcoin goes to one million?
It would become one of the richest companies on the planet with about 140,000,000,000$ worth of Bitcoin in reserves. Although this would make MicroStrategy super-rich. It still would not make them the richest or biggest company on the planet in revenue or even market cap. With some large US tech companies that are almost 10 times the size, they would be.
By the time this happens, riches will have been made but it would be likely to see other large players and perhaps countries scoop up similar Bitcoin allocation sizes. Putting MicroStrategy just among one of the large players in the industry.
One danger that comes with the way MicroStrategy exists though is that it is a public company in the US and thus is bound by US laws. If the US for some reason decides to take away their BTC for whatever reason. They probably could take the company down in some way. Even tho they would not be able to do something like this to anyone’s BTC holdings in particular. As the US does not have control over Bitcoin. But it does have some form of control over the company's operation within its border.
Investing in Microstrategy
MicroStrategy has been playing the Bitcoin long game for some time now. They have not only bought BTC with their cash reserves but also borrowed money to buy more Bitcoin. Thus somewhat leveraging on Bitcoin. This strategy has so far worked out for them. But is a rather risky one compared to only buying BTC with cash reserves.
Besides owning BTC and issuing debt against it, they also have a normal business that generates income. Making for a very interesting company structure. Investing in MicroStrategy is thus not only investing in their business but mostly in a leveraged Bitcoin position at the same time.
This can be the perfect option for some investors, especially for those that do not know how to even get started with Bitcoin themselves. Buying Microstrategy stock Thus might be a nice middle way between the traditional investor and the new-day crypto and Bitcoin investor.
Microstrategy’s ownership
Once Bitcoin goes into the millions of dollars. MicroStrategy will be a rich company. But not all of this capital will be owned by 1 person. No, because MicroStrategy is a public company in the US, they are technically owned by everyone that holds some shares of the company.
This is of course divided in a way like most other companies. With the founder owning a large part. And institutions have another very large share of the pie. And at the tail end of it all, there are the individual investors that own some shares as well.
Anyone with access to the stock market can in theory become a share owner of MicroStrategy and thus own part of their Bitcoin holdings. So on the way to diversification to some Bitcoin or leveraged BTC, MicroStrategy could be an interesting addition to any investor's portfolio.
Conclusion
MicroStrategy as a company does not hold too many Bitcoins. As they do not endanger the network or make it more centralized. The company is decently making somewhat risky moves. But does seem to have a bright future ahead with the adoption of Bitcoin growing all around the world.
However, for anyone from the world of traditional finance, MicroStrategy might be an interesting move. As long as the US government does not decide to step in and ruin the party. Till then or if that never happens, it is to be expected to keep on seeing MicroStrategy and its CEO Micheal Saylor actively on the Bitcoin seen. Trying to push Bitcoin adoption to the next level wherever they can.
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