Recent data from blockchain analytics firm IntoTheBlock indicates that around 29% of Bitcoin’s total supply, which has been stagnant for more than five years, may be lost forever.
New data unveiled by blockchain analytics firm, InTheBlock, reveals that almost 29% of Bitcoin’s total circulating supply could be lost forever, showing no signs of moving for more than five years. This highlights an inherent attribute of Bitcoin (BTC) – its scarcity – as only 21 million coins can be mined. However, the very feature that increases Bitcoin’s appeal to investors is a double-edged sword, leading to the risk of irreversible loss of assets if private keys are misplaced or forgotten.
IntoTheBlock recently drew attention to the surge in dormant Bitcoin addresses. “Our data shows that 29% of $BTC has not moved in over five years. It’s possible that much of this is lost parts,” the company noted in its tweet.
On-chain metrics monitoring Glassnode Alerts added weight to these findings, stating that the total amount of HODLed or lost Bitcoins reached an all-time high of 7,781,224.168 BTC. Given that the current price of a single Bitcoin is hovering around $30,000, this represents over $235 billion in BTC potentially lost forever.
Bitcoin’s future under the shadow of lost assets
Over the past year, institutional interest in Bitcoin has seen a significant increase, with companies such as MicroStrategy expanding their BTC portfolio. The rise in static addresses could suggest that more individuals and entities are adopting bitcoin as a long-term investment strategy rather than for immediate transactions or spending. However, it may also involve the permanent loss of substantial volume of Bitcoin, especially by early adopters.
Given the propensity of early investors to take advantage of Bitcoin’s huge price increase, the latter possibility seems more likely. Over the years, the price of Bitcoin has skyrocketed, making even modest amounts in the early days incredibly valuable now. If these investors still had access to these inactive Bitcoin addresses, it is reasonable to assume that they would have already been activated.
As BTC continues its path to mainstream acceptance, many people, lured by the prospect, have entered the cryptocurrency realm without fully understanding how to properly secure their private keys. A notable example is Stefan Thomas, a San Francisco-based programmer who unable to access his bitcoin holdings — a hefty 7,002 bitcoins — simply because he can’t remember his digital wallet password.
With Bitcoin’s supply capped, its increasing scarcity, compounded by the loss of coins, could further boost its appeal as a store of value. This, in turn, could potentially fuel a price increase due to growing demand and reduced supply.