An estimated 29% of all bitcoins in existence have been sitting idle for over five years, with most of them possibly lost forever. This is shown by data from the cryptanalysis company IntoTheBlock.
The research cited by Crypto News reveals that the loss of nearly 30% of the total circulation of bitcoins highlights one of the most characteristic attributes of the cryptocurrency – its limited supply.
Bitcoin’s blockchain algorithm assumes that the maximum amount of all “mined” tokens is 21 million.
However, the very feature that increases Bitcoin’s appeal to investors is a double-edged sword, leading to the risk of irreversible asset loss. This can happen if private access keys are lost or forgotten, reminds IntoTheBlock.
The company notes the significant surge in passive Bitcoin addresses.
“Our data shows that 29% of bitcoins have not moved for five years. It is possible that a large part of this amount, in fact, represents lost cryptocurrencies,” IntoTheBlock experts note.
The Glassnode Alerts platform adds further weight to these findings by showing that the total amount of bitcoins lost has reached an all-time high of 7,781,224,168 bitcoins in total.
Considering that the current price of one bitcoin hovers around $30,000, that represents more than $235 billion in cryptocurrency potentially lost forever.
In the past year, institutional interest in Bitcoin has increased significantly, and many investment and hedge funds have increased the size of their crypto portfolios.
The rise of static addresses perhaps suggests that more individuals and organizations are embracing bitcoin as a long-term investment strategy rather than a means of immediate trade or payment.
But at the same time, the trend could also signal a permanent loss of significant Bitcoin volume, especially from early adopters who bought their cryptocurrencies long ago.
Over the years, the price of Bitcoin has skyrocketed, which is why even modest amounts purchased 7-8 years ago are now much more valuable. If these investors still had access to the Bitcoin addresses, it would make sense that their activity would increase.
As Bitcoin, as the most popular cryptocurrency, has become more widely accepted, many people, attracted by the prospects, have entered the realm of cryptocurrencies without fully understanding how they can properly protect their private keys.
A notable example is San Francisco developer Stefan Thomas, who was unable to access his impressive wallet of 7,002 bitcoins simply because he couldn’t remember his digital wallet password.
Since the supply of Bitcoin is limited, increasing scarcity, compounded by lost coins, could further enhance its appeal as a store of value.
This, in turn, could fuel a potential further price increase due to increased demand and reduced supply.
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2023-07-23 11:03:02
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