After 10 years of existence, the value of Bitcoin (BTC) has been mostly speculative, which led to a gain of more than 18,000% of its value in 2017. Today, Coinmetrics data shows that 21% of existing Bitcoins have not moved in 5 years.
Bitcoin remains a valuable reserve while units are lost every year
Satoshi Nakamoto’s BTC has not yet been successfully adopted into traditional society. When presented in the 2009 White Paper, the Bitcoin was intended to be a revolutionary token for secure and decentralized payments. One of the main objectives of the father of Bitcoin was to reduce the evils inherent in currencies, which cannot be exempted from the hegemony of political and financial institutions. However, during its 10 years of existence, the progression of Bitcoin in real life has gone unnoticed with a slim volume of adoption, given the complexity of its operation and the problems related to the speed (and costs) of executing transactions. dIn addition, from January to November 2017, the value of Bitcoin increased from $1,000 to over $18,000, becoming the most volatile asset in history. But once again, it has failed to play an essential role, particularly as an intermediary for trade.
Today, just under 18 million BTCs are in circulation. Recently, Coinmetrics, a platform specialized in the analysis of data on the evolution of crypto money, highlighted an essential element by reporting an impressive volume of BTCs inactive for more than 5 years, representing 21% of the total offer, or more than 4 million BTCs. It seems likely that these Bitcoins will be lost forever, on private keys that users have lost or deceased owners, for example. These 4 million BTCs now correspond to the equivalent of 40 billion dollars, a colossal amount. The number of Digital Gold units available is therefore much lower than one might imagine and much closer to 14 million than the 18 million displayed on CoinMarketCap. The amount of BTC tokens lost each year can only increase, leading to the depletion of assets.
Waiting for the next halving in 2020
Limited to a ceiling of 21 million BTC, the number of Bitcoins will stop growing in the next decade if we refer to the principle of halving block rewards. This process called “halving” occurs after a certain number of blocks. In 2020, in the next division, the scarcity of Bitcoin may lead to an increase in its value, mainly as fewer and fewer units of Bitcoins will be distributed as rewards to miners in addition to the BTCs probably lost in the coming months.
Bitcoin, used as a speculative asset, until when?
In 2019, CCN reported that the share of tokens from market transactions was only 1.3%, a figure that reflects the low utility of crypto money as a currency of exchange. Also, the part intended for speculation will continue to grow, with the increasingly regular arrival of financial products backed by the BTC, in particular, futures, ETFs, etc…. For the time being, efforts to bring crypto money closer to traditional finance are continuing, notably with the recent launch of Bakkt.