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The big bitcoin misconception...

by , 16 September 2019
The big bitcoin misconception...
Right now, there's a big misconception in the crypto market.

And it's got to do with circulating supply.

That's the total supply of tokens currently available in the market.

Once investors understand this concept it could lead to another massive price surge in the price of bitcoin.

Let me explain…

       
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‘Lost’ coins mean circulating supply is inaccurate which can lead to a market rerating
 
The specific crypto market size is generally determined by the price of the token multiplied by the circulating supply of the token.
 
The way circulating supply is calculated is to take into consideration every token issued. But what if some of these tokens were actually lost?
 
You see, while most investors store their coins safely in a digital wallet, many investors have actually lost access to their bitcoin. In other words, they can't sell it or spend it.
 
And you’ll be surprised to find to know how many are lost…
 
According to software company Chainalysis, nearly 4 million Bitcoin have been lost (lost passwords, lost wallets or laptops). And there’s a good chance they’ll never get them back.
 
A further 5 million bitcoin are stored in digital wallets or similar.
 
In total, that's 9 million bitcoin. This is the circulating supply.
 
It’s also more than half of the 17 million bitcoin that have ever been mined.
So, do you see why it could be misleading?
 
Some people think that 9 million bitcoins are in the hands of investors right now. but that’s not true.
 
And because 4 million have been lost (and probably will never be seen again), the supply of bitcoin is becoming scarcer.
 
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So what will investors do when they realise there are half as many Bitcoin available than previously thought?
 
People will rush to buy them, as the coins become scarcer. And subsequently, this could spark a rally in the crypto space.
 
But believe me, this is not the only reason why Bitcoin’ price could rise.
 
Wall Street is starting to invest in the crypto industry. And coming up on 23 September, the Intercontinental Exchange (ICE), the world’s second-largest exchange by market cap, will offer trading of two Bitcoin Futures Contracts, which could bring in more crypto investors.
 
So if you haven't invested yet, there’s still time!
    
See you next week.
Joshua Benton,
Managing Editor, The South African Investor 
 
P.S. Bitcoin is not the only crypto poised to rise. My colleague Sam Volkering believes this one crypto could in fact, eclipse bitcoin and help investors turn a tiny sum of R1,000 into R220k.


The big bitcoin misconception...
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