Bitcoin advocates often speak of the digital currency as a democratizing asset, but a recent study published by the National Bureau of Economic Research indicates otherwise.
The report shows that just 0.01% of bitcoin owners, or about 10,000 accounts, hold 27% of the 19 million coins in circulation. That would be about 5.1 million bitcoins, which recently were valued at $245 billion.
By contrast in the U.S. economy as a whole, the top 1% of households control about one-third of all wealth, according to the Federal Reserve.
The study was authored by economists Igor Makarov of the London School of Economics and Antoinette Schoar of Massachusetts Institute of Technology.
Meanwhile, Cornell University economist Eswar Prasad last week voiced skepticism about the biggest digital currency.
“Bitcoin itself may not last that much longer,” he told CNBC. “Given that bitcoin is not serving well as a medium of exchange, I don’t think it’s going to have any fundamental value other than whatever investors' faith leads it to have.”
Bitcoin isn’t used much for transactions of legal goods and services, so it serves largely as a vehicle for speculation, the currency’s critics say.
In addition, private cryptocurrencies may face competition from government ones.
Digital currencies have “lit a fire under central banks to start thinking about issuing digital versions of their own currencies,” Prasad noted. The Federal Reserve is researching the issue itself.
One investor, Cathie Wood of Ark Investment Management, isn’t worried. She said earlier this month that bitcoin could soar another $500,000 as institutions increase their allocation to it.