New Reports Conclude 30-36% Of Circulating Bitcoin (BTC) Supply Is Lost

Two research firms recently released findings of a year-long study that shows that over one-third of the Bitcoin currently in circulation is lost.

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Two research firms recently released findings of a year-long study that shows that over one-third of the Bitcoin currently in circulation is lost.

New Reports Conclude 30-36% Of Circulating Bitcoin (BTC) Supply Is Lost
Source: Chainalysis

A worrying amount of Bitcoin inaccessible

According to Chainalysis and Diar, 36 percent of all BTC in circulation is either “lost, likely lost, or unmined.” Of that, 7 percent of BTC is likely lost while 29 percent is lost or unmined.

Public data shows the total circulating supply of the leading cryptocurrency stands at 17,298,925 BTC. According to the Bitcoin protocol, a maximum of 21 million Bitcoin coins can be mined.

The two reports also state that speculators hold about 22 percent of the current circulating supply, while long-term Bitcoin investors are said to hold about 30 percent of the nearly 17.3 billion bitcoins that are currently in circulation.

The amount of BTC held for speculative purposes amounts to just over 3.8 million coins while that held by long-term investors comes to around 5.2 million coins.

According to a report that covered the period between spring 2017 and August 2018, holders sold about $24 billion worth of Bitcoin (BTC) to first-time speculators.

The massive sale occurred between December last year and April this year, although over 50 percent of these sales occurred in December.

At the time, BTC prices (as well as that of other digital assets) were on a great rally that ended with the top coin trading at almost $20,000 against the US dollar.

However, that injection of high liquidity functioned as a fundamental driver that triggered the substantial price decline witnessed at the end of 2017 and for much of 2018.

Is Bitcoin scarcer than thought?

We already know that Bitcoin will become scarce with time, especially once miners hit the mining cap of 21 million. But putting the Chainalysis and Diar reports into perspective means that scarcity may be more severe than first anticipated, considering that about 6.227 million BTC are unavailable that were previously thought to be in circulation.

Even with the issuance of the remaining 3.7 million Bitcoins still waiting to be mined, the total number of Bitcoin is arguably still too small to be declared anything but scarce.

This fear of Bitcoin’s scarcity may have been the reason behind Litecoin creator Charlie Lee’s advice to the crypto community this past July.

In a controversial tweet, Lee advised anyone interested in buying cryptocurrency to consider having at least one bitcoin first before going on to invest in any of the other coins.

He believes that there won’t be enough BTC, even for millionaires to own a whole bitcoin. His comments raised some heat back then, especially after Lee referred to all altcoins, including his Litecoin (LTC), as “shitcoins.”

Is it time to buy Bitcoin?

Many analysts have predicted that Bitcoin will likely rally again to reach new price levels, with many saying that will happen in the next year or two. Bitcoin bulls have variously stated that the crypto has already hit bottom, meaning a rally is imminent.

Perhaps the most significant indication that Bitcoin is seen as a significant investment is the fact that it continues to attract the interest of some of the biggest institutional investors, including many Wall Street behemoths.

Names like BlackRock, Goldman Sachs, Nasdaq, and Bakkt have all shown interest in offering Bitcoin-based products. The entry of Wall Street is seen as a big boon for crypto and could see an upsurge in value.

While investing in crypto continues to be a risky business, Bitcoin represents an asset with huge interest and likelihood to give investors excellent returns.

Additionally, the cryptocurrency market is probably more mature to than it was over a year ago, especially after the so-called “weak hands”, those were after a get-rich-quick opportunity, panicked and sold their investments.

According to Chainalysis, the entire digital currency market has “recalibrated,” and with as adoption increases, the future of Bitcoin could be a lot brighter.

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