Breaking record after record, Bitcoin has hit the $10,000 mark on a few exchanges and is approaching that mark on the rest.
But when every market analyst is watching the movement of the bullish coin and making investment strategies, a New-York based analytics firm, Chainalysis, as reported by Fortune, published a study in which it found out that up to 3.79 million bitcoins have been lost forever.
The firm gives a high estimation of 3.79 million and a low estimate of 2.78 million. This means that 17 – 23 percent of total bitcoins have been lost.
According to the study, most of the lost coins belong to numerous accounts which have been forgotten for years.
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Presumably, these accounts belong to the early miners and people who brought the Bitcoin in its early days when the token’s price was almost negligible compared to today’s. Chainalysis also estimated that nearly 20-40 percent of these accounts would never be used again as it is most likely that the owners have forgotten the key or even the fact that they possess something which is worth so much today.
Similar loss of wealth happens in mainstream fiat economics as well. People often lose track of money and even valuable jewelwelry. But the central banks can always print more fiat currency and put them into the circulation, something which is not possible with digital currency.
So when all 21 million bitcoins are finally mined (estimated year: 2040), there will actually be a lot fewer in active circulation. The lost 3.79 million coins make up one-sixth of the ultimately minable total.
Kim Grauer, a senior economist at Chainalysis, talked about Bitcoin scarcity and if the current market value is considering these missing coins in an interview with Fortune: “That is a very complex question. On the one hand, direct calculations about market cap do not take lost coins into consideration. Considering how highly speculative this field is, those market cap calculations may make it into economic models of the market that impact spending activity. Yet the market has adapted to the actual demand and supply available – just look at exchange behavior. Furthermore, it is well known monetary policy procedure to lower or increase fiat reserves to impact exchange rates. So the answer is yes and no.”