3,700,000 Bitcoin already lost forever

Chainalysis: 3,700,000 Bitcoin already lost forever

A slip of paper with the inscription: „One per Customer“, which hangs on an empty supermarket shelf.

The amount of Bitcoin is known to be limited. But what is the proportion of lost BTC? Chainalysis gets to the bottom of this question and sees the increased number of institutional investors as a price driver.

There are many myths surrounding lost Bitcoins. In its search for reasons by Bitcoin Freedom for the BTC price rally 2020, the block-chain analysis company Chainalysis has come to a highly remarkable conclusion

In its new report, the company says that there are currently around 14.8 million Bitcoin in circulation. However, this is in addition to a considerable amount of BTC, to which access is no longer available. According to current information, this amounts to 3.7 million Bitcoin worth approximately $66.5 billion. They are considered lost forever and no longer available to new buyers. The loss can have very different reasons, ranging from lost private keys, lost hardware wallets or hard drives to deceased owners who have not passed on access.

What is the proportion of hardcore hodlers who do not touch their Bitcoin assets, so to speak „on principle“? One can only speculate about this. The Chainalysis Report at least makes an approximation hypothesis and in any case sees some parallels to the BTC price increase of 2017.

Share of institutional BTC investors growing

At the moment, the amount of liquid Bitcoins is similar to the 2017 price rally, but the amount held in so-called ‚illiquid‘ wallets is much higher than it was then and currently accounts for 77 per cent of the 14.8 million Bitcoins. Illiquid wallets are not considered lost. Chainalysis uses this term when BTCs have not been transferred from their current address for five years or more. This is usually assumed to be institutional investors.

This high proportion of ‚illiquid‘ BTCs means, conversely, that buyers have a pool of only 3.4 million Bitcoin available to them when demand increases. However, demand is increasing, as the Chainalysis report shows beyond doubt. The trading intensity measures the number of times each Bitcoin deposited at an exchange is traded there before it leaves the platform. It is currently 38 percent above the 180-day average.

The report may not be able to predict how long the share price will continue to rise, but it does give a clear indication of the extent to which the share price will increase. But it does see positive signals for the crypto currency.