Supply Concentration (Z-Score)
Expanding Z-score of the illiquid supply ratio, a trend proxy for supply concentration. Readings are in standard deviations around zero : positive means above the historical mean (accumulation), negative below it (distribution).
What is it?
The Supply Concentration Index is a Trinity 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 original 'Herfindahl Index' wording was dropped from the title - 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
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 original 'Herfindahl' wording was dropped from the title: 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/metrics/supply-concentration-hhi/data?timeframe=90d' \
-H 'X-API-Key: $TRINITY_API_KEY'MCP server
{
"tool": "get_chart_value",
"metric_id": "supply-concentration-hhi",
"timeframe": "1y"
}Required tier: pro. See the pricing grid for the tier list and the MCP documentation for multi-client configuration.
Related metrics
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.