- Lost Bitcoin might total some $35.3 billion according to Chainalysis
- 20% of Bitcoin’s circulating supply hasn’t moved for at least 5 years
- Lost or discarded wallets the likely culprits
Chainalysis has claimed in a recent report that 20% of the circulating Bitcoin supply is lost having not been moved in at least five years, meaning that 3.6 million Bitcoin is inaccessible, with a total value of $35.3 billion. The blockchain tracking company made the claim in a recent report that looked at how much Bitcoin is actively traded as opposed to being held long term, which also concluded that the vast majority of Bitcoin in circulation is rarely moved, with just 3.5 million actively traded.
Lost Bitcoin Down to Mining, Wallets, and Carelessness
The news that the amount of lost Bitcoin could equate to 3.6 million might seem staggering at the current prices, but there are various reasons why this is completely plausible.
Firstly, the Bitcoin price five years ago was around $245, 97% cheaper than it is today. And this is the date Chainalysis uses as its benchmark – many wallets will date back past this when Bitcoin was just a few dollars or even cheaper. This will have made it easy for almost anyone to buy a few hundred Bitcoin if not thousands.
Secondly, Bitcoin mining on a computer was possible until the first ASIC miner was launched in 2013. This meant that enthusiasts could grab themselves a nice Bitcoin stack just by letting their computer churn away night and day, which is how Craig Wright and Dave Kleiman got their hands on a million Bitcoin in its very early days.
Thirdly, the attitude towards Bitcoin storage has changed drastically over the past eleven years. Back when Bitcoin was worth just a few bucks people would store them on hard drives in unencrypted wallets – hard drives they would break, lose, or throw away. They would also forget passwords and mis-send coins, leading to more going astray, incidents that wouldn’t have caused too much concern for most at the time.
No Chance of Removal From Circulating Supply
Taking these factors together, as well as the sad fact that some holders will have died without passing on their details to loved ones, it is very easy to see how there could be $35 billion worth of lost Bitcoin out there. It is shame from Bitcoin holders’ point of view that these coins cannot be written off and taken out of the circulating supply, but there might be a few people who have something to say about that.