Supply Concentration (Herfindahl Index)TRINITY EXCLUSIVE
EXCLUSIVE - Herfindahl-Hirschman Index applied to Bitcoin address balances, measuring supply concentration among holders. A rising HHI marks whale accumulation; a falling HHI reflects broader distribution.
Trinity exclusive model
This metric is a proprietary Trinity Insights model. Its formula, inputs, weights and parameters are NOT disclosed. The page documents only the output (bounded scale, interpretation zones, historical context). Access to the score and its time series is via the REST API and the MCP server, subject to the required tier.
What is it?
The Supply Concentration Index is a Trinity exclusive proxy that tracks the trend of Bitcoin supply concentration. It calculates an expanding Z-score (statistical normalisation over full history) of the ratio between illiquid supply (hodled or lost coins) and total circulating supply. This Z-score measures whether the illiquid supply ratio is statistically above or below its historical mean. A rising positive Z-score indicates supply is concentrating in hands that do not spend (structural accumulation); a rising negative Z-score indicates dilution of that concentration (distribution). The 'Herfindahl' name in the title is a conceptual analogy - the calculation does not use the classic HHI formula (sum of squared shares) but a statistical proxy based on illiquid/liquid dynamics.
How to read
The Z-score oscillates around zero. Above zero: the illiquid supply ratio is above its historical mean - supply is more concentrated than normal, marking structural accumulation. Below zero: the ratio is below its mean - more coins are actively circulating, marking relative distribution. Values beyond ±2σ mark statistically extreme conditions. Slope changes are more informative than absolute levels.
Key zones
Rapidly rising Z-scores have historically coincided with silent accumulation phases - often in bear markets when small holders sell under psychological pressure. Rapid Z-score declines were observed during euphoria phases when many coins are put back into circulation. Readings beyond +2σ mark statistically extreme accumulation; below -2σ, extreme distribution.
What to observe
Z-score/price divergences are the most informative indicator. If price falls but the Z-score rises, illiquid supply is increasing during the drop - historically constructive. If price rises but the Z-score falls, the rally is driven by supply re-entering circulation without structural support - historically fragile. Compare with STH/LTH data to understand which cohort is driving the change.
Historical context
The secular Z-score trend reflects Bitcoin's maturation as an asset. Early years (2009-2013) showed extreme values as few addresses held most of the supply. The long-term trend moves toward normalisation, but with cyclical oscillations. Each bear market produces a Z-score rise (accumulation in pain), and each bull market a decline (distribution in euphoria).
Expert notes
⚠️ Trinity Exclusive Model - This metric uses the illiquid/total ratio as a concentration proxy - it does not decompose supply by address balance brackets (unlike a true HHI). The advantage: it relies on the blockchain's hodled/lost classification, which is robust and reliable. The limitation: it does not distinguish concentration by holder size. For more granular analysis of who is accumulating, cross-reference with address metrics (whale-addresses-1k, entity-clustering).
Common mistakes to avoid
A positive Z-score does not mean 'the rich are getting richer' - it measures the trend of the illiquid/total ratio, not distribution by portfolio size. Similarly, the 'Herfindahl' name in the title is an analogy: the calculation is a Z-score of the illiquid supply ratio, not a sum of squared market shares. Do not compare levels directly with a classic HHI (0-10,000 scale) - here, the scale is in standard deviations around zero.
Programmatic access
REST API
curl -sS \
'https://api.trinityinsights.io/api/v1/onchain/supply-concentration-hhi/history?days=90' \
-H 'X-API-Key: $TRINITY_API_KEY'MCP server
{
"tool": "get_chart_value",
"metric_id": "supply-concentration-hhi",
"timeframe": "1y"
}Required tier: performance. See the pricing grid for the tier list and the MCP documentation for multi-client configuration.
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Institutional disclaimer
Trinity Insights is an educational and analytical tool. The metric above does not constitute investment advice. Trinity Insights is not a Crypto-Asset Service Provider (CASP) registered under MiCA Regulation (EU) 2023/1114. See the full disclaimer.