Bitcoin is a financial revolution emerging for a number of reasons. But one of the attributes that give it the most value is its digital, hard-coded scarcity. With just 21 million BTC supplies, this is the toughest form of money in the world.
However, according to an expert in the field, Willy Woo, the supply is much closer to 17 million. Because of this, the amount of BTC evenly distributed across the rapidly growing population is tiny, which shows how rare the cryptocurrency really is.
Honey, I’ve shrunk the BTC supply: Why are there really only 17 million left?
Bitcoin is often compared to gold and is nicknamed “digital gold”. Both are hard assets with extremely limited supply that help balance the levels of supply and demand positively with demand.
This relative rarity, especially at a time when dollars are in print and the fiat balance sheet soars 20% this year alone, has made the two tough assets shine after the pandemic.
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With uncertainty in the air and a dollar on the verge of decline, investors are increasingly turning to gold and bitcoin. Both assets outperformed stock market returns this year, but even Bitcoin has outperformed gold more than three times as the supply of cryptocurrency is so scarce.
The blockchain network was coded in such a way that only 21 million BTC were unlocked over time – nothing more. But Bitcoin expert Willy Woo warns that there are actually far fewer.
The total supply of Bitcoin will not be 21 million, but around 17 million, as many coins died fighting for recognition as something valuable in the early days.
This means 0.002 BTC per person on the planet.
– Willy Woo (@woonomic) October 28, 2020
Woo says up to 4 million BTC were lost in the “battle for recognition as something of value in the early days”.
What Woo means by this is that the earliest holders of Bitcoin had no idea what it would ultimately become in terms of value. Would you have taken perfect care of something that was practically worthless? The answer is no, and millions of BTC may be lost forever because private keys have been misplaced, death occurs, or coins are sent to the wrong address.
Every decimal point Bitcoin became a little more worth remembering | Source: BLX on TradingView.com
Bitcoin whales that absorb supplies leave even less for small fish
If there is ever less BTC than expected, the rarity of the asset is even more pronounced and important to its valuation. When capital comes in, it is divided into even fewer coins, with fewer overall coins ever being sold in the market, lowering prices.
The data shows that the number of whale wallets of 1000 BTC or more has grown to its highest level ever, so the remaining supply is rapidly decreasing. That’s not to say these whales won’t end up selling, but since bitcoin’s bull market is just beginning, it may take a while for these hands to stop staying strong.
Related reading | Bitcoin whale wallets with 1000+ BTC or more spike to the highest levels in history
Due to the sudden surge in companies adding BTC to corporate treasury reserves, only 24 companies alone are believed to own 3.6% of the BTC supply as of late.
If this is the case, and these whales and companies keep picking up the supply, there will be nothing left for the small fish.
According to Woo, with the 17 million he cites, there will only ever be enough bitcoin for the world’s population to have 0.002 BTC if it is evenly distributed.
But as the distribution of wealth has shown in the past, and even a decentralized asset cannot escape, businesses and the rich will end up buying up the lion’s share of what is left for BTC, leaving even less for the world’s ever-growing population.
Mathematics alone makes Bitcoin possibly the most powerful commodity in human history, and one thing that will continue to prove that it can determine the value at which it is traded is that it continues to rise.
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