The social consequences of Bitcoin at a million dollars (and at 10 million)/2

Last week we looked at the profile of the cryptocurrency investor.

This week, we take a closer look at the size of the cryptocurrency phenomenon in Italy, in terms of how widespread it is and how much weight it has in Italians’ wealth. How many have them and how much they have.

Let’s start by saying that there are no hard data. By their very nature, cryptos protect their owners’ privacy. The only reliable information, we might even say certified in re ipsa, since it is recorded on the blockchain and therefore public, concerns addresses. By analogy with the traditional banking system, we can say that account balances (and individual transactions) are public, but not the account holders.

The few available studies focus, as usual, on North America. However, there are no specific reasons to think they can’t be extended in some way to our national context too, although some factors suggest that here it may be a slightly more elitist phenomenon. We always refer to Bitcoin, to keep the reasoning simple and because of its weight in the crypto universe, with a dominance of over 60% of total market capitalization.

Some analyses of crypto penetration in Italy give a fairly wide range, from 1.5 to 3.5 million owners, holders in technical terms, including those who own just an address with a zero balance, that is, an empty one. We can work with a middle value of 2 million, which represents 7.1% of the population aged 20 to 60, the age groups most inclined towards this kind of investment (although, as we said, the distribution is heavily skewed towards the young).

Some studies suggest that no more than 2% of owners hold one Bitcoin or more. The figure is broadly consistent with the distribution of addresses by value: about 1.8% have a balance of more than one Bitcoin (this, at least, is a certain and public figure). Bear in mind, though, that nobody keeps their crypto holdings in a single address, so it’s plausible that many holders close to 1 BTC have spread it across several addresses of smaller individual value. So let’s assume that in Italy, too, 2% of the two million holders own at least one Bitcoin.

That makes 40k people. Let’s go on. In Italy, about 450k people have assets (liquid savings, investments in securities and pension funds, as well as real estate) of at least one million (2023, Boston Consulting Group study, reported by Il Sole 24 Ore). This wealth, however, isn’t evenly distributed. About 60% is held by the over-60s. So, considering only the 40% we’re interested in, that’s about 180k millionaires under 60.

Bitcoin at a million would therefore increase the number of millionaires under 60 by over 20%. Which is a lot, though not an enormous amount in purely numerical terms, but it’s quite another matter in terms of social cohesion. Not least because not all millions are the same (the liquidity factor comes into play) and not all millionaires are the same.  But we’ll talk about that next week.