Here are the world's net-wealth bands. (Source Credit Suisse Global Wealth Databook 2016).

Global net-wealth bands.

73% of adults have a net worth of less than $10'000. Whilst the above table assumes a minimum net worth of at least $100, the reality is that many have a net worth of zero, or negative.

There are nearly 33 million dollar millionaires on the planet, representing 0.68% of all adults.

Here are the bitcoin wealth-bands by numbers of wallets. (Sources: for September 2017 data: bitcoinprivacy.net. for September 2016 data: blog.lawnmower.io.

Bitcoin wealth bands.

The number of bitcoins in the second table above corresponds to the global net wealth bands in dollars (first table) divided by 100'000.

Dollar wealth bands compared to bitcoin wealth bands:

Multiple wallets, merged wallets, zombie coins, "dust", and exchanges.

It is not possible to determine the actual number of bitcoin users by looking at the number of bitcoin wallets. The number of bitcoin addresses with more than zero balance is 19.8 million. The true number of actual users is likely to be different due to the following factors:

1. Many users hold multiple bitcoin addresses. If each bitcoin user holds on average 3 addresses it would imply that there are around 6.6 million bitcoin users, or roughly one-in-six-hundred of the adult population.
2. Merged wallets are wallets with multiple owners. This may be something as simple as a husband and wife, or it could be a bank, company, family office, or an ETF/ETN with tens of thousands of investors. If we take into account the number of "shared" bitcoin addresses, it implies that the number of bitcoin users is higher than the 19 million bitcoin addresses.
3. Zombie bitcoins are coins which are held in bitcoin addresses which have had no movements in several years. The coins are dormant. If there is even a tiny fraction of bitcoin spent, ALL of the coins in that address are no longer considered dormant. In all likelihood, the majority of these coins were mined in the early years of bitcoin - when it was virtually worthless. The private keys have been lost, or are sitting at the bottom of a landfill somewhere. The number of such dormant coins is estimated at around 3 million. If we assume that these dormant coins are never going to come back to life - the private keys will never be found, then the number of users could be several million less than the 19 million count of addresses.
4. "Dust" refers to bitcoin addresses whose balance is so small that it will never be touched. It's a bit like spotting a coin at the bottom of a drain. If it's just a penny, you probably won't go to the trouble of retrieving it. We can argue where the cut-off point is. It may be different for different people. The fact is there are millions of wallets with microscopically low balances. Of these, only 4.5 million bitcoin addresses have a value of more than $40. This could imply that the maximum number of serious bitcoin investors is less than 4.5 million, or less than 1 in 1000 adults.
5. Exchanges are places where many people to choose to hold their bitcoins. The exchange may have tens of thousands of users, but only a small number of addresses. This implies that the number of bitcoin users is higher than indicated by a wallet count.

As can be seen, there are factors which potentially increase as well as decrease the number of bitcoin users compared to the number of wallets. My opinion, is that the different factors cancel each other out.

Furthermore, in counting the number of potential bitcoin users, I would disregard wallet addresses with less than $40. I know this is quite arbitrary, and $40 is a lot of money to some people. However for me, you are not really a bitcoin user if your commitment is just $40. A fair estimate of the number of users is thus, in my opinion, roughly equal to the number of bitcoin addresses holding more than 0.001 bitcoin (above $40). In other words, there are about 4.5 million bitcoin users equal to slightly less than one adult in one thousand.

What percentage of each global wealth band is a bitcoin user?

Let's align the global dollar wealth bands in table 1 above, with the wallet balances in table 2 above. Using a recent price of $4'000 per bitcoin, the implicit conclusion is that the a typical bitcoin user has around 4% of his net wealth in bitcoin. Of course it wasn't like that at the start of the year, when the bitcoin price was below $1000, or this time last year (Sept 2016) when the price was around $600. Then a typical user would have had less than 1% of his net wealth in bitcoins. Given that there is very little change in the number of wallets in each wealth band, between Sep 2016 and Sep 2017, we can also conclude, that there was not much selling despite the price rise. Most bitcoin users didn't sell despite seeing the value of their holding rise eight-fold in one year.

What can we conclude from the above table? The wealthiest part of the population were early adopters of bitcoins, but there was virtually no change in the number of large wallets, indicating that some large holders were reducing their positions while others entered.

Millionaires are still not very interested in bitcoin.

Adults with a net worth in the $1 million to $50 million range were slow to invest with the number of wallets increasing by only 7% in the year from Sept 2016 to Sept 2017. Investors with a net worth below $1 million were the fastest expanding group, seeing increases in the number of new investors well above 30%.

Cash-flow into bitcoins

At first sight we might think the cash flow into bitcoins over the last year can be determined by the respective market caps:

This would be a mistake, as some of the coins, are for all practical purposes, un-tradeable, such as the zombie coins. Other coins are held by long-term permanent investors who have no intention of trading them at any price. Other coins are traded multiple times in a year.

The most obvious way to infer the number of coins which are available for trading, is to look at the actual number of coins traded. Over the last year an average of 250'000 bitcoins changed wallets daily. Whist some would have been transfers between the same owner, (just splitting a wallet), most likely represent the result of some activity, which we can call as a trade or potentially a trade.

Last year, there were approximately 9.1 million bitcoins which changed wallets. We can assume most of these were trades. Probably around 4.5 coins moved to exchanges for sale and 4.5 million moved away from exchanges after purchase.

Thus we had a total increase in the bitcoin market cap of $56.6 billion driven by purchases of 4.5 million coins. Given that the average price per bitcoin over the last 12 months was about $1258, this implies that new investors were willing to invest a total of $1258 X 4.5 million = $5.66 billion. That resulted in a tenfold increase in the market cap.

What can we expect to flow into bitcoin over the next 12 months?

As can be seen in the chart below, the penetration rate of bitcoin users in the population remains very low, well below 1%.

Given the very low penetration rates, there is plenty of room for the number of users to grow at the same rate over the next year as the last 12 months.

Let's ignore the largest investors worth more than $50 million. The table below shows that we can expect around $5 billion to flow into bitcoin over the next 12 months.

This increase could have the same kind of leveraged effect as in 2017. Geometrically it would produce a price of around $100'000 for bitcoin this time next year. Arithmetically the price should nearly double to over $7'000. Take your pick!

Based on last year, the biggest increase should come from the $100k to $1 million net worth bracket, who currently have a penetration rate of less than one-tenth of one percent.

Outlook for the bitcoin price.

Given the extremely low penetration rate of the fasted growing wealth band, (those with net wealth of $100k to $1 million), the prospects for continued growth in bitcoin users is very good. As demonstrated above, this could easily accelerate the price of bitcoin to a very high number by this time next year. The range is $7'000nto $100'000 by September 2018, as illustrated above.

Massive government intervention could get in the way of this growth. If governments make bitcoin illegal, its price may fall back to nothing more than that of a mere token, of interest only the geeks. It's a possibility to which I would attach 40% probability. 40% lose 100% or 60% make 2000% means the odds seem good. Can you risk the loss? It's the old story - only invest what you are prepared to write off - and make sure that includes your spouse too.

A lot of work

It took me three solid days of work to research and gather all the above information. If you liked it, I will do more. (I am not actually sure anybody reads these things).