Individuals are experiencing positive transformations thanks to Bitcoin
In the ever-evolving world of finance, two assets are making headlines for their distinct ownership patterns: gold and Bitcoin. A comprehensive report titled "What drives Bitcoin adoption in 2025?" by Goldman Sachs sheds light on these differences.
The report reveals that gold, predominantly in the form of jewelry, is the most decentralised asset, with 45% tied up in rings, chains, and bracelets, while bars and coins make up around 22%. Nearly 10% is held by ETFs, excluding other funds. Interestingly, companies and institutions, including jewelry retailers and churches, also hold a significant share of gold. However, the report does not provide clear values for the distribution of gold.
On the other hand, Bitcoin is a different story. If Bitcoin were to become the store of value of the future, it would shift wealth from institutions and companies to individuals. This is due to the fact that individuals hold much larger shares compared to gold and especially to Treasury bonds. However, determining the exact distribution of Bitcoin is challenging, with the report noting that it does not provide detailed specific data on Bitcoin distribution among holders or addresses.
The bull market is currently being driven by institutions and companies, who are accumulating bitcoins. This trend is evident in the report's diagram showing the distribution of bitcoins at the end of 2024, which shows bitcoin is still overwhelmingly in the hands of individuals. At that time, individuals held almost 70% of the bitcoin money supply, with funds, companies, and governments combined holding less than 12%.
The report also highlights a dramatic change in bitcoin accumulation that occurred in 2024, with around half a million bitcoins transferred to funds and ETFs. This shift in ownership from individuals to companies and funds is further emphasised in a graph from River, a bitcoin company.
However, the report notes that the Asia-Pacific region shows stronger interest in Bitcoin compared to Europe, where cryptocurrencies are more viewed as speculative assets. It also mentions that 11 percent use Bitcoin as a tail-risk hedge, akin to digital gold.
In contrast, the chart from the Peter G. Peterson Foundation suggests that individuals hold directly in their portfolio around 21% of the $28.7 trillion in Treasury bonds, with the actual share likely to be significantly lower. This indicates that the distribution of US Treasury bonds among individuals and funds is difficult to determine.
Lastly, it's worth noting that central banks hold 17% of available gold, compared to only 1.4% of Bitcoin that is held by governments. Sovereign wealth funds likely hold several thousand tons more gold than is currently accounted for in the chart.
In conclusion, the Goldman Sachs report provides a fascinating insight into the shifting wealth trends between gold and Bitcoin. While Bitcoin is held in much larger private shares than gold, determining the exact distribution of both assets remains a challenge.
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