Recent data from blockchain analytics firm IntoTheBlock suggests that roughly 29% of the total Bitcoin supply, which has been stagnant for more than five years, could be lost forever.
The new data revealed by the blockchain analytics firm, IntoTheBlock, revealing that nearly 29% of the total circulating supply of Bitcoin could be lost forever, showing no signs of moving for more than five years. This highlights an inherent trait of Bitcoin (BTC) – its scarcity – as only 21 million coins can be mined. However, the feature that increases Bitcoin’s attractiveness to investors is a double-edged sword, which leads to the risk of irreversible asset loss if private keys are lost or forgotten.
IntoTheBlock recently brought attention to the spike in dormant Bitcoin addresses. “Our data shows that 29% of $BTC hasn’t moved in over five years. A large part of this likely has to do with lost coins,” the company noted in its tweet.
Monitor the gauges on the chain Glassnode Alerts Additional weight to these results, indicating that the total amount of HODLed or lost has reached an all-time high of 7,781,224.168 BTC. With the current price of one bitcoin hovering around $30,000, that’s more than $235 billion worth of bitcoin that will likely be lost forever.
The future of bitcoin in the shadow of lost assets
Over the past year, institutional interest in Bitcoin has seen a significant increase, with companies like MicroStrategy expanding their BTC portfolio. The rise in stable addresses may indicate that more individuals and entities are adopting bitcoin as a long-term investment strategy rather than immediate trading or spending. However, it could also mean the permanent loss of a significant amount of Bitcoin, particularly by early adopters.
Given the tendency of early adopters to cash in on bitcoin’s massive price increase, the latter possibility seems more likely. Over the years, the price of Bitcoin has skyrocketed, making even modest amounts from the early days incredibly valuable now. If these investors still have access to these inactive Bitcoin addresses, then it is reasonable to assume that they are now activated.
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As BTC continues its journey towards mainstream acceptance, many individuals, attracted by expectations, have entered the world of cryptocurrencies without fully understanding how to properly secure their private keys. A prime example is Stefan Thomas, a programmer based in San Francisco Unable to login his Bitcoin holdings – which are 7,002 Bitcoins – simply because he can’t remember the password to his digital wallet.
While limiting the supply of Bitcoin, Bitcoin’s increasing scarcity, combined with lost coins, could increase its attractiveness as a store of value. This, in turn, can lead to an increase in prices due to an increase in demand and a decrease in supply.