Analyzing the Largest Crypto Wallets: Insights and Challenges

Analytical services use advanced techniques to identify major cryptocurrency wallet holders by analyzing groups of addresses and transaction data. They aim to provide accurate insights into wallet ownership, but the accuracy of such estimates can vary.

In late September, Arkham Intelligence, a data analysis platform, announced its discovery of a cluster of 36 million addresses linked to Coinbase. These addresses collectively held Bitcoins valued at around $25 billion by the end of September. This includes both "hot" wallets used for daily operations and "cold" wallets for long-term storage. The largest of the identified "cold" wallets contained approximately 10,000 Bitcoins, worth roughly $265 million at the time. Additionally, analysts estimate that Coinbase holds approximately $2.6 billion worth of Ethereum (ETH).

The process of identifying cryptocurrency addresses belonging to specific exchanges can vary among analytical services. In the United States, where Coinbase is registered, exchanges often provide data on their addresses' classifications to enhance security. However, there can be discrepancies in data between different analytical services due to various data sources.

Grigory Osipov, Director of Investigations at the cryptocurrency asset security service "Shard," explains that this approach is common, especially in jurisdictions where exchanges share such data with government-affiliated analytical firms. Other methods include purchasing databases from leaks, tracking cryptocurrency movements on targeted services, or monitoring specific resources. Once data on one address is obtained, it can be used to trace thousands of related addresses based on specific criteria.

While Arkham's revelations have garnered attention, some experts remain skeptical of the accuracy of their claims. Dmitriy Machikhin, founder of BitOK, points out that verifying the information published by such analytical firms can be challenging. Their assumptions may be based on insider leaks, making it difficult to independently confirm ownership.

Arkham's estimates of Coinbase's holdings may also provide an incomplete picture, as the exchange's recent quarterly report to the U.S. Securities and Exchange Commission (SEC) indicated client assets and liabilities in Bitcoin amounting to $60.7 billion.

The anonymous Bitcoin creator, often believed to have mined a substantial amount in the cryptocurrency's early years, presents a challenging case. Arkham representatives estimate that Satoshi Nakamoto's wallets may contain between 750,000 and 1.1 million Bitcoins, making them the largest individual holders of the cryptocurrency. Other identified major holders of Bitcoin include Binance, Grayscale, and Robinhood.

Arkham's list of major Bitcoin holders also includes the governments of the United States and China, which collectively hold around 400,000 Bitcoins, some of which were seized from criminals. According to Osipov, government entities and large investment funds have increasingly engaged in mining and cryptocurrency acquisition for investment and risk hedging.

While companies like Arkham aim to bring transparency to the cryptocurrency market, the balance between anonymity and openness remains a challenge. In fiat currency terms, a company's asset data can be disclosed in financial reports, but information about specific accounts holding funds is considered proprietary. This dynamic presents difficulties in identifying and analyzing the cryptocurrency addresses of public companies and individuals, and the issue remains largely unresolved.