New research from Chainanalysis, a digital forensics company that studies the bitcoin blockain, suggest an estimate of 2.78 million – 3.79 million bitcoins are wiped off the market. This corresponds to a 17% to 23% of the current bitcoin supply which today would be worth between 26.68 – 36.38 billion dollars. Their research relies on a detailed empirical analysis of the blockchain, where all the transactions are recorded.
The graph above shows the distribution of how these coins are actually lost. The coins mined are in 2017 are unlikely to be lost whereas the original coins from the early days in 2009 and 2010 account for quite a significant proportion of the lost coins. If you were a miner at the very beginning of the bitcoin era and you stored 7500 bitcoins on a hard drive that you threw away, those coins are essentially lost. Important to mention that the bitcoins that are hacked are not truly lost since the hacker now holds the bitcoin. Additionally, bitcoins bought as a strategic investment and for long-term holding have been lost only in small amounts (~4%).
The “Original Coins” category represents the bitcoins held by the cryptocurrency’s creator, known only by the pseudonym Satoshi. Nothing has been heard of him since 2011 and the presumption is that his associated wallets represent 1 million bitcoins – which, in this report, are assumed to be lost.
Speaking to Fortune, a senior economist for Chainalysis, Kim Grauer, talked about Bitcoin scarcity and if its current value already takes into account the missing coins:
That is a very complex question. On the one hand, direct calculations about market cap do not take lost coins into consideration. Considering how highly speculative this field is, those market cap calculations may make it into economic models of the market that impact spending activity. Yet the market has adapted to the actual demand and supply available – just look at exchange behavior. 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.