Cryptocurrencies are appealing to investors due to their scarcity and Bitcoin is a great example of this. It is estimated that by 2140, the total circulating supply of Bitcoin will be around 21 million BTC. However, the actual supply of Bitcoin is a lot lower compared to what people may think it is since ‘one in five’ BTC in circulation today are either reported to be ‘stolen or missing’.
The Lower Bitcoin Supply
Although it remains to be seen if the price of Bitcoin actively correlates with the supply, it is a valid metric regardless. A scarce cryptocurrency with a fixed low supply will usually see an increase in its value in the near future. For Bitcoin, the supply cap of 21 million has been a topic of debate as many financial experts claim it hinders the growth of Bitcoin in the long run because its supply is limited.
Cryptocurrency proponents feel a supply cap is direly needed in the financial sector because when compared to traditional fiat currencies, which can have their supply increased at any given time, Bitcoin cannot.
However, the total supply of coins in circulation is a lot different from what the average statistics may indicate. Research by Chainalysis confirms one in five bitcoin have gone missing over the years, effectively reducing the total current supply by nearly 3.4 million BTC.
Although some of these funds may be recovered over time, it is safe to assume most of those coins are lost forever.
What’s the Reason Behind This Loss?
Since most consumers aren’t accustomed to taking care of their financial assets directly, they usually rely on third-party service providers, including online wallets and exchanges. When such companies disappear or shut down, their funds are lost forever. Additionally, a lot of early Bitcoin miners threw away hard drives containing cryptocurrency wallets without making any backups.
Even so, various firms can actively help users recover their missing Bitcoin funds with a bit of luck. Although not all of these ventures will prove to be successful in the long run, these services are effectively making some impact. The success rate of recovering missing bitcoins is usually around 30% or less, and spending money on any of these efforts is not necessarily a smart option.
Final Thoughts
With so many BTC lost in limbo, it is only normal that there will be people who claim that they can help recover these misplaced assets. Even so, the wallets stored on hard drives which have been thrown away years ago cannot be recovered in any official capacity at this time.
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