Everyone has heard of it. Only 21 million Bitcoins will ever exist. There are already 19.6 millions bitcoins mined.
How would the situation change if there was an even greater urgency? Even if there were only 21 millions, the situation would be even more dire.
In order to truly appreciate bitcoin’s value, it is important to recognize that 21 million units does not reflect the reality. By doing this, you will gain a better understanding of the true scarcity of bitcoin and its value proposition. You’ll also feel more confident when it comes to navigating through market cycles.
By taking bitcoin’s supply into account, volatility becomes less significant. In times of high market prices and euphoria, the true scarcity of bitcoin makes it a good idea to buy at the peak while other investors are making profits.
Bitcoin’s 21 Million
Satoshi Nakamoto is the owner of the largest bitcoin stash in history. On-chain detectives have revealed that Satoshi Nakamoto, the creator of Bitcoin, was the first miner on the Bitcoin network. This allowed the pseudonymous person to accumulate 1.096 millions coins. Nakamoto’s only known transaction is the 10 BTC that he sent to early Bitcoin pioneer Hal Finney.
This million or more coins is what we often refer to as “zombie coins,” These coins have not changed in value since Bitcoin was first traded on an exchange. UTXOs, which total 1.457million coins, suggest that the coins have been lost forever.
In a matter of seconds, almost 7% (or 7,000 bitcoins) are effectively unreachable. This 21 million number is shrinking.
The sheer amount of coins lost is staggering. The data suggests that there are still millions of coins in existence from the early days of Bitcoin. The on-chain analysis tells another story about Bitcoin’s supply. It is likely to be associated with the early miners, or those unfortunate souls who forgot their old wallet keys.
Analysts David Puell & James Check, in their report Cointime Economics (Cointime Economics), estimate that between 3,89 and 4,87 million coins may be lost. This includes both Satoshi’s coins and zombie coins.
You can read more in our opinions section. While bitcoin prices soar, I am having fun while remaining poor
For the sake of simplicity, they admit that there’s some uncertainty when it comes to estimating the lost coin count. Let’s use the lowest estimate. Bitcoin has now been reduced from its original 21 million to just 17.11 million. This is an 18% decrease.
Are you feeling the FOMO yet?
It’s getting worse, or better depending on the amount of bitcoin that you have. A growing number individuals and institutions are reluctant to part with their Bitcoin. It is impossible to accurately measure the number of coins that are being removed from circulation. Any estimations must wait until more time has passed. Rest assured that they are out there.
Michael Saylor is the poster boy for holding. He is the CEO of MicroStrategy and has amassed a total of 205,000 bitcoins, with another 17,000 for personal use.
He was asked in an interview if he planned to ever sell any of his investments. “I’m gonna be buying the top forever.”
Just like that, another 1 percent of Bitcoin will never be seen on the market again.
Saylor is just one of the many tens or even millions of investors who are increasingly inclined to hang on no matter what happens in a market, whether it’s a downturn, bull run, etc. Proof is the increasing supply of long-term crypto holders, which has reached an all time high during a harsh crypto winter.
Bitcoin is more rare than people thought. It’s reasonable to estimate that, after accounting for all the lost coins as well as the coins which holders will not part with, the supply is down by about 20%. This means that there will be less than 16,8 million Bitcoins available until the last block has been mined.
As we near another half-discount, watch the unprecedented bitcoin ETF buying spree by Wall Street sponsors and wait for the buyers to arrive, it is time to set the stage. It’s time to get your piece of bitcoin; only 16,8 million, and possibly even less are left. Take action.
RJ Fulton, a crypto analyst and author who is self-taught, has been writing for the past five years. RJ Fulton has contributed to projects such as Stacks, and financial platforms including The Motley Fool. RJ Finance is a voice that’s shaping the conversation in crypto. RJ, who believes that decentralized technology can transform economic sovereignty and demystify a burgeoning cryptocurrency landscape, explores the potential of crypto to do so. He is open to exploring new possibilities and hopes to contribute his analytical skills to projects that align with his desire to leverage digital assets to create a new financial age.
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