Bitcoin Supply Far Less Than 21 Million, Says New Research

Bitcoin Supply Far Less Than 21 Million, Says New Research

Its common knowledge that there are only 21 Million Bitcoin in existence, but recent research shows that number might be closer to just under 14 Million when accounting for coins that are presumably lost forever or locked away for extended periods of time.

Maybe you have heard of the “21 Million Club,” the mythical group of people who own at least 1 Bitcoin, also known as “whole coiners.” In a world with over 7 Billion, this particular group comprises about 0.3% of the entire population.

With Bitcoin back in the spotlight after the most recent halving, new combined research presented by InvestAnswers suggest that the 21M club might actually be closer to the “just under 14 million club” as Bitcoin supply continues to dwindle and coins are lost or locked away by treasuries.

Its estimated that 90% of the Bitcoin supply has been mined so far, or 18.9M total coins. All that remains is about 2M Bitcoin left to mine until the year 2140, over 119 years away, meaning that the supply of new coins entering the market is decreasing at a rapid pace.

The last Bitcoin will take 40 years to mine and 95% of the supply will be mined by March 2048.

5 Million Bitcoin Are Believed to Be Lost Forever

The amount of Bitcoin that has been lost to date to missing private keys or other user error is estimated to be in the realm of 3.7M coins, according to various sources familiar on the matter. The death of Bitcoin billionaire Mircea Popescu left nearly 125,000 coins in his wallet, presumably never to be recovered.

According to data released by Cane Island Digital Research (CIDR), 4% of Bitcoin will be lost each year to hard drive / wallet failures, lost seed phrase or key, and users sending Bitcoin to the wrong address (these might not get lost but who knows what happens).

These incidents are not uncommon and is a risk that comes with managing your own funds. Assuming this number is correct and stays constant until 2048, self custody will drain an additional 7M from the supply.

The number of incidents may get reduced as users become more sophisticated or third-party custody is more commonplace. If the number was reduced to a conservative estimate of 1% per year on average, the Bitcoin supply drain from these incidents would total 1.7M of the supply by 2048.

1.5 Million Bitcoin are held in treasuries

Treasuries are institutions or governments that hold Bitcoin account for about 11% of the supply. Some of these names are well known such as MicroStrategy, Tesla, Square, etc. Countries like Bulgeria, Ukraine, Finland, El Salvador, and Georgia are all known to own Bitcoin, whether seized by criminals or purchased for investment purposes.

Another 1.04M is Locked in the Satoshi Wallet

In the first seven months of Bitcoin’s existence, creator Satoshi Nakamoto mined as many as 1.1 million Bitcoin. This fortune is now worth in excess of $30 billion and remains untouched in a cold wallet to this day.

Miners are Not Selling

When Bitcoin was in abundant supply, miners would sell Bitcoin on the market to cover operating expenses like electricity and computational power. As supply continues to dwindle, many of these mining operations are turning to fiat loans to cover their expenses, while holding on to Bitcoin for the long term.

Only 13.8M Bitcoin are Actually Circulating

The total Bitcoin supply is closer to 13.8M or about 2/3 of the 21M original max supply when you account for all of these factors. Recent analysis from crypto market intelligence firm Glassnode estimated that long-term bitcoin holders own roughly one third of the total supply.

As time goes on, the Bitcoin will become more scarce, thanks to its deflationary nature. As governments continue to increase fiat supplies through monetary policy, the exchange rate to Bitcoin will most likely increase along with demand.