On-chain data examined by blockchain analytics firm IntoTheBlock has revealed that roughly 29% of all bitcoins (BTC) in circulation have remained unmoved for more than five years.
In a Monday tweet, analysts at the firm said a large part of the unmoved assets might be lost coins.
Ever wondered how many Bitcoins are lost forever? Our data shows that 29% of $BTC hasn’t moved in over 5 years. It’s possible that a large part of this concerns lost coins. #Bitcoin
— IntoTheBlock (@intotheblock) July 17, 2023
IntoTheBlock’s latest analysis echoes a recent report from crypto exchange Bitfinex, which disclosed that the amount of unmoved BTC has reached a new all-time high, leading to a decrease in the asset’s liquidity.
Bitfinex also reported that approximately 70% of BTC’s circulating supply has remained dormant for at least a year; this is the highest ever recorded since the inception of the leading crypto asset.
While there is no specific reason for the current and prolonged dormancy of a significant portion of BTC, several factors are considered to have led to the development.
As IntoTheBlock’s analysts speculated, most of the coins could be lost forever. On the other hand, it could be a sign of growing interest from investors, especially institutions, who have a bullish sentiment toward Bitcoin and believe in the asset’s long-term potential.
The HODLing attitude from both large and institutional investors indicates an expectation of positive price action for BTC, showing that they consider the crypto asset a viable investment option.
Another factor to consider is the upcoming Bitcoin halving event slated for April 2024. Every four years, at 210,000 blocks, a mechanism in the Bitcoin network slashes the block reward for BTC mining by half. Bitcoin’s fourth halving will reduce block rewards from 6.25 BTC to 3.125 BTC.
The event is viewed as a bullish sign because it enhances BTC’s prospective scarcity, supports its supply-demand dynamics, and affects its value positively.
As the halving approaches, crypto funds and investment firms are accumulating BTC at its current price level, increasing their holdings, and positioning themselves for positive price action.
