Unlike fiat currencies, the supply of Bitcoin, the world’s largest cryptocurrency, is limited.
Recently, there has been talk of Bitcoin supply dwindling due to early investors holding on for dear life (HODL). with the entry of deep-pocketed institutional investors into the market. Now, there’s chatter that as much as 20% of Bitcoin supply may be lost forever because account holders can’t remember their passwords.
“In other news, about 20 percent of the 18.5 million bitcoin in existence are reportedly stuck in lost or inaccessible digital wallets, the New York Times (NYT) reported, citing Chainalysis data. That’s about $140 billion today, the report stated,” writes PYMNTS.com.
Bitcoin, blockchain, and cryptocurrencies provide a new avenue to transfer wealth instantaneously over the internet. The crypto asset market has been an innovative disruptor, reflecting all the classic phases of a disruptive technology.
What’s Ahead for Digital Gold?
Bitcoin has sometimes been referred to as “digital gold,” with supporters suggesting it could serve as a good safe-haven investment. However, the cryptocurrency has tended to trade closer to equity markets in recent times and has been plagued by massive volatility, which has either made investors fortunes, or crushed them.
Integral to the case of expanded acceptance and use of digital assets is conveying value properties to investors. This can be done in two ways: by measuring either intrinsic or monetary value. Bitcoin represents freedom at a time when so many governments are actively increasing capital controls. Although a pullback is likely and even natural for the cryptocurrency following this stellar run, that doesn’t mean upside from here is limited.
“Unlike a typical bank account with password protection and recovery, bitcoin accounts are secured with a private key that only the user knows. To access a bitcoin account, bitcoin’s software uses complex algorithms that can confirm the password without actually knowing it. So, anyone can create a bitcoin wallet, without going through a financial institution or identity check — but it means there’s no backup when the user forgets or loses their key, NYT reported,” adds PYMNTS.com.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.