The supply of Bitcoin circulating is dwindling. As bitcoin becomes more mainstream, institutional investors are gobbling it up. They hold the coins long-term, with just 24 organizations holding 460,500 bitcoins, effectively holding three percent of bitcoins in circulation.

Who is Hold Them?

Automaker Tesla just bought 38,500 bitcoins costing $1.5 billion. CEO Elon Musk considers it an alternative reserve investment opportunity.

MicroStrategy also holds a little less than 71,000 bitcoins worth $3.3 billion. CEO Michael Saylor says he plans to acquire more. The company offers businesses software, analytics and cloud-based services.

Satoshi Nakamoto, the supposed founder of bitcoin reportedly holds 1.1 billion bitcoin.

Bitcoin trading platform MtGox K K holds about 141,690 bitcoins, worth $6.6 billion.

The US government also holds a large stash of bitcoins, although no one knows the exact amount. Different agencies seize assets from criminal cases, some of which are sold at auctions. Strategically timed sales are almost impossible as the price of bitcoins is always changing and by the time the agency gets permission to hold an auction, the price may drop.

Why Do Entities Hold Bitcoins?

Bitcoins are a hedge against inflation because there is a finite supply. It's the new gold as a way to store value. Miners can create 21 million bitcoins using computational power, but that is the limit. Unlike gold, which is also mined, there are no more bitcoins to create. Gold mining companies may still discover new sources of gold.

It's estimated that long-term investors hold about 80 percent of all bitcoins. Originally, bitcoin was created to eliminate the middleman in financial transactions and to eliminate storing personal information of users by using decentralized networks. It's come a long way from being for the unbanked and its use by criminals. Now bitcoin is seen as an investment vehicle for the wealthy and major institutional investors.