The Bitcoin Obituaries page says that the cryptocurrency has been declared dead 371 times since its invention. Despite the bearish predictions, as of August 1, the digital currency officially had 85 percent of its token supply in circulation. There are now only 3.15 million tokens out its total fixed quantity of 21 million units left unmined.
A data monitoring resource shows that miners have now extracted the 17,850,000th unit in a transaction validation process. As part of its programming, the number of coins awarded to miners per block decrease over time. This means that the remaining tokens will be mined out in 120 years, which is in the year 2140.
Pundits have consequently made an official Bitcoin scarcity announcement. As the token’s supply currently stands, only 17,850,000 people can now lay claim to a full BTC coin. To compound the scarcity situation further, some of the coins mined are no longer in supply. A large amount of the cryptocurrency has been lost from the internet, meaning that there is less Bitcoin left for traders and investors.
Bitcoin (BTC) Scarcity on a Rapid Rise
A Chainalysis report estimates that over 3.79 million of the cryptocurrency is gone for good. The digital forensics firm says that between 17 percent of 23 percent Bitcoin ever mined; each worth $10,850, at the time of press, can’t be accounted for. The report is based on an empirical analysis of the Bitcoin blockchain, where all the token’s transactions are recorded.
As the token gains massive value and appeal, the losses will become fewer as holders become more vigilant. An alternative school of thought is that the rapidly increasing unmoved BTC, suggests that the token is a good store of value. More investors are purchasing it to HODL, rather than to use as a medium of exchange. As the Bitcoin rallies keep pushing the value higher, the number of unmoved BTC may rise too.
Another event about to further fuel the demand of the token is the forthcoming halving event. From May 2020, miner payouts are being cut from 12.5BTC per block to 6.25BTC. Most analysts believe that this occurrence will further push the BTC price higher.
Will Price Correct Higher?
This decreasing supply of the cryptocurrency has many analysts bullish over BTC prices, despite the dip in value. The coin has undergone a 33 percent correction dropping from a $13,739 high to a $9,600 value. Filb, a well-known crypto analyst, has forecasted that the decrease in BTC supply ensures that the token will not dip below $6,500.
Filb attributes this to increasing BTC miner support as miners exert growing influence over the token’s prices. The analyst writes:
“Satoshi said himself rightly pointed out that commodity costs are likely to gravitate to production cost. Why? Because miners will sell into demand where revenue per unit > cost per unit. Likewise, collectively, they are disincentivized to sell when revenue < cost.”
He further adds that miners are going to take actions such as; “Sell production / Hedge down while existing MC is still low, Limit selling pre halving to envoke new halving bubble back to current prices, Limit sale of production, Maximize revenue per unit, Sell new bubble”, as scarcity ensues.
Besides, it has been noted that the Bitcoin’s network hash rate and difficulty are increasingly setting new records. This is a signal that competition amongst miners has peaked. It, besides, means that the network is getting more secure for its users.