According to recent research by blockchain analytics firm IntoTheBlock, approximately 29% of Bitcoin's total circulating supply is considered lost, residing in addresses that have remained inactive for over five years. This highlights how the limited supply of Bitcoin, which contributes to its appeal for investors, can sometimes result in assets being permanently lost. As mentioned in IntoTheBlock's tweet, the number of inactive Bitcoin addresses is quite high. This lost Bitcoin amount has been confirmed by Glassnode Alerts, which tracks on-chain data, and a new record was observed with 7,781,224.168 BTC lost. The value of these lost Bitcoins exceeds $235 billion when the price of a single Bitcoin is around $30,000.
Lost Coins of Bitcoin:
In recent years, there has been an increase in institutional interest in Bitcoin, with companies like MicroStrategy multiplying their Bitcoin holdings. Therefore, the rise in inactive addresses could indicate that people are holding Bitcoin as a long-term investment or store of value rather than actively trading or spending it. However, it could also reflect the Bitcoin lost by early investors. As the price of Bitcoin has risen over time, small amounts of Bitcoin from the early days have turned into significant wealth. Thus, if investors still had access to these inactive Bitcoins, they would likely move them. However, circumstances such as forgetting or losing private keys can lead to the permanent loss of these assets. #bitcoin $BTC
Security of Private Keys:
As Bitcoin's popularity has grown, many individuals purchased Bitcoin without fully understanding how to properly secure their private keys. The situation faced by Stefan Thomas, a programmer based in San Francisco, serves as an example. Thomas cannot access 7,002 Bitcoins because he cannot remember the password that contains the private key for his digital wallet. These assets are currently worth $216 million. Similarly, many individuals have lost or forgotten their private keys.
Appeal as a Store of Value:
Due to Bitcoin's fixed supply, the increasing scarcity resulting from lost coins can enhance its appeal as a store of value. The reduced supply of Bitcoin in circulation can lead to price increases due to heightened demand. This has contributed to the growing interest in Bitcoin by major investment firms. For instance, applications for spot ETFs from significant companies like BlackRock have boosted Bitcoin's price in recent months. The cryptocurrency has seen a 43% increase this year and has been hovering around $30,000 in recent weeks. #BTC #private #blockchainanalytics #blockchains
In Summary:
According to research by blockchain analytics firm IntoTheBlock, approximately 29% of Bitcoin's circulating supply is lost. These lost Bitcoins reflect situations where investors have permanently lost their assets. Factors such as forgetting or losing private keys contribute to these losses. However, the increasing scarcity resulting from lost coins can enhance Bitcoin's appeal as a store of value. Being viewed as a store of value can contribute to increased demand for Bitcoin and potential price appreciation. Nevertheless, investors should exercise caution in securely storing Bitcoin and properly safeguarding their private keys.
