Arkham Identifies Grayscale As Second Largest Bitcoin Holder

The blockchain analytical firm Arkham Intelligence has Grayscale’s Bitcoin Trust as the second largest holder of Bitcoin (BTC), distributed among over 1700 addresses. 

The revelation comes despite Grayscale’s attempts to keep the trust’s on-chain addresses under wraps. 

Grayscale Bitcoin Trust Second-Largest BTC Holder 

Arkham Intelligence made the disclosure on X (formerly Twitter) in a post on the 6th of September. The firm revealed that the Grayscale Bitcoin Trust is the second largest BTC entity in the world, with the fund containing more than $16 billion of the world’s largest and most popular cryptocurrency. This checks out with Grayscale’s website, which states that the total assets under the firm’s Bitcoin trust are over $16 billion. 

“Breaking: Arkham has identified the Grayscale Bitcoin Trust’s holdings on chain. It is the 2nd largest BTC entity globally, holding >$16B of BTC. Though Grayscale publicly reports balances, they have refused to identify the on-chain addresses of the trust.”

Although Grayscale publicly declares all balances, it has never identified the trust’s on-chain addresses. 

BTC Distributed Among Over 1750 Addresses 

Arkham also revealed that the Bitcoin is distributed among over 1750 different addresses. Each of these addresses holds about 1000 BTC or less. The addresses were identified despite Grayscale’s continued efforts to keep all of the trust’s on-chain addresses under wraps. Last year, Grayscale faced considerable speculation and scrutiny about its Bitcoin balance following the collapse of the FTX exchange. 

At that time, Grayscale had cited several security concerns as the reason why it was not publishing or disclosing any of the on-chain addresses associated with it. 

“Due to security concerns, we do not make such on-chain wallet information and confirmation information publicly available through a cryptographic Proof-of-Reserve or other advanced cryptographic accounting procedure.”

Coinbase, the trust’s custodial partner, later released a report that detailed the assets it held on behalf of Grayscale, subduing the speculation to an extent. 

“The digital assets underlying each Grayscale product have their own on-chain addresses, as we use client-by-client custody segregation.”

Pioneer At Identifying Specific Addresses

Arkham Intelligence’s disclosure cements the firm’s position as the pioneering entity when it comes to identifying specific addresses that are associated with the GBTC fund. Arkham had previously identified Grayscale’s Ethereum Trust as the second-largest holder of Ethereum. Addresses associated with Grayscale’s Ethereum Trust held around $5 billion worth of the asset. It had also identified Robinhood as the holder of the third-largest Bitcoin wallet and the fifth-largest Ethereum wallet. 

Meanwhile, GBTC’s discount has remained under 20% despite bearish sentiments that have kept BTC’s price under the $26,000 mark. The discount had dropped to its lowest levels in two years after Grayscale secured an important court victory against the United States Securities and Exchange Commission. The court ruled in Grayscale’s favor, stating that the SEC acted arbitrarily and capriciously in rejecting the firm’s attempt to convert its Bitcoin Trust into an ETF (exchange-traded fund).

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.