As Bitcoin’s price continues to climb ever higher, a new report suggests that nearly 4 million bitcoins may have been lost forever.
Could Bitcoin Rise Even Higher?
Today, Bitcoin managed to surpass yet another milestone, arriving at a new all-time high price of over $9000. There are many speculations on why Bitcoin has managed to rise so high in such a short time. One of the more popular theories is that Wall Street and other big institutional investors are diversifying their portfolios by buying into the digital currency. Many experts are suggesting that Bitcoin-related financial instruments like ETFs and futures may be the driving force behind Bitcoin’s recent meteoric rise. Some Bitcoin community members, however, have speculated that the recent price rise may be caused by the number of Bitcoins that have been lost forever.
Nearly Four Million Lost Bitcoins
A recent article in Fortune reported on a research study that was conducted by a blockchain analytics company regarding lost Bitcoins. The New York-based company, Chainalysis, was founded in 2014 and specializes in blockchain analysis and the tracking of cryptocurrencies. Two of Chainalysis biggest clients include the IRS and Europol. In a study conducted by the blockchain forensics company, they arrived at the conclusion that 3.79 million Bitcoins have been lost forever. That is currently almost 23% of the circulating supply and has a current market value of $34 billion. The data is based on the existing supply and transaction activity of the Bitcoin blockchain.
Speaking about whether or not the findings mean bitcoin is more scarce than people assume, Chainalysis CEO Jonathan Levin stated:
Yet the market has adapted to the actual demand and supply available – just look at exchange behaviour. 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.
It is still unclear if the market has priced-in the enormous amount of Bitcoins that are forever lost. Experts believe that in the future, the amount of Bitcoin that gets ‘lost’ will become less since the value of each Bitcoin is steadily rising.
What are your thoughts on Chainalysis research? Do you think that around 4 million lost Bitcoins are going to affect the price of Bitcoin? Let us know in the comments below!
Images courtesy of Pixabay, Chainalysis, Tumblr