Cryptocurrency’s poster boy, Bitcoin, has experienced a mammoth boom over the past few days, and it’s making a lot of people rich.
After something of a lull last year, the Bitcoin frenzy is back in full swing, soaring past its 2021 peak last week. Minting new millionaires at an astonishing rate, Kaiko Research has revealed that the rally is creating around 1,500 new “millionaire wallets” every single day.
These wallets — for those new to the crypto craze, “wallets” are just digital addresses on the blockchain where users store their cryptocurrency — can be analysed thanks to the transparency of the blockchain network, allowing anyone to view the number of tokens a given wallet holds. However, the anonymity of the addresses makes it almost impossible to determine whether they belong to individuals or larger entities.
WATCH: How Bitcoin Gets Mined
Bitcoin’s remarkable recent surge — jumping by around 70% already this year — is largely due to growing demand for US exchange-traded funds (ETFs), which were first allowed to hold Bitcoin tokens in January. Despite this impressive rate of millionaire-making, the pace is actually slower than during the bull market run of 2021 when more than 4,000 wallets a day were reaching the million mark.
Bloomberg suggests that several factors could be contributing to this slowed pace: Fresh capital has yet to pour in and large Bitcoin holders — often referred to as “whales” — are cashing out as Bitcoin hits new highs. Whales may also be opting to store their holdings with custodians rather than in personal wallets this time around.
Kaiko’s report explains this more cautious approach:
“In 2021, there was a huge influx in capital as all manner of bulls sought to benefit from the crypto hype… This time around, whales could be taking a more cautious approach, waiting to see if the gains have legs before investing.”
Kaiko Research
As Bitcoin continues its ascendance, the creation of millionaire wallets is testament to the long-term potential of Bitcoin and crypto writ large with whales’ cautious approach suggesting a maturing market.
Crypto’s 2024 Revival
According to Forbes, crypto saw a strong recovery in 2023 after a years-long slump amid wider uncertainty in global macroeconomics.
Now, the two largest cryptocurrency coins by capitalization — Bitcoin and Ethereum — have shown strong rallies since the start of the year, leading to hope among crypto investors for Bitcoin to keep on rising until the “halving event“, expected to take place in April 2024.
Overall, the crypto market has shifted from huge losses incurred in 2022 and 2023 to a Bitcoin-led rise since October 2023 and is currently holding firm at these record levels not seen since late 2021.
The second-most popular coin, Ethereum, is similarly on the rise, jumping by almost 70% to $3,976 USD so far this year. While it’s still quite a way off from its November 2021 peak of $4,644 USD, it still marks a massive recovery since its $1,500 USD price point a year ago, in March 2023.