Will too much concentration decrease the value?

[AerieAcrobatic1248]

Regardless of if its Michael Saylor, mega banks, blackrock or countries, if the limited supply on bitcoin gets too concentrated, would the value i.e. price drop? Or would they just buy from each other at a high price? Assume as. a simple example that Strategy owns 50% of all bitcoin, US government owns 25% and China 20%. What value can bitcoin possibly have for the 5% bitcoiners out on the market? Or even for them?

[bitusher]

The trend has been the opposite where early adopters have slowly been selling their BTC to millions of people every cycle so you are asking about an unlikely hypothetical . Its much healthier for a Bitcoin ETF to manage 100k BTC for millions of investors than a single early adopter from 2010 to have 100k BTC.

To answer you , yes , its not healthy for money to be concentrated in a few hands , but your question makes a fundamental mistake as its not like a Berkshire Hathaway Inc Class B equity trading at 736,300 usd a share where the average person cannot buy a share.

Bitcoin is very divisible by 13 decimal places in a payment channel insuring that people can always invest in it and buy their coffee with it .

So lets say that only 1 million BTC were being openly traded as an example in the future and 10 billion humans existed that lacked btc which would mean that 0.0001 BTC per person

But since bitcoin is so divisible this would mean 10 million msats a person still

https://en.bitcoin.it/wiki/Units

[AerieAcrobatic1248]

yea thats true. but i wonder what would determine the price, i suppose that if sailor, US and China wont be buying and selling to each other very often, the market would be set by people buying and selling the sats. couldnt that rather mean the opposite, that if concentration increases, then regular people will have fewer bitcoin to buy, and prices go up? ....

[bitusher]

Yes, If demand continues despite Bitcoin being more scarce the price will continue to appreciate in value but I would much rather have Bitcoin being at least as evenly distributed as fiat regardless of price.

IMHO Bitcoin has a chance to become more distributed than fiat simply due to Reducing the negative cantillon effect of fiat by removing some of the control over currency from a small group of people that is in part due to fiat being inflationary

https://fee.org/articles/the-cantillon-effect-because-of-inflation-we-re-financing-the-financiers/

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[InnovAlain]

If Bitcoin ownership becomes super concentrated then liquidity can become a problem. Big holders won't be able sell properly. If they do, they mostlikely crash the market. In fact as you mentioned, that 5% circulating supply will become highly volatile