Bitcoin Forum

Saw this on a reply to a thread on another forum, I don't know how true it is, and I wasn't sure the exact feeling or reaction I should have towards it, but it made me wonder how dangerously 'immutable and self-custodian' btc is.

These coins are probably locked in wallets whose keys are forgotten, destroyed, or owned by people who have passed away. That’s about 3.7 to 4 million BTC, even higher than the amount in Satoshi's wallet. This definitely impacts on the circulating supply of btc and reducing it far below the 21 million hard cap.

While it sound tragic, I think it is actually bullish for Bitcoin’s price or maybe not, not really sure!!!. But what I think is that those coins acts like a permanent burn, thus helps increase scarcity and making btc even more valuable.

I would like to know if folks here think this statistics is actually correct and pros and cons if true

You should drop a link to where that stamen were made from that other forum or quote the place. Let's check if there was the actual data used to draw that conclusion. 

Many just conclude that some wallets which have not moved their coins since their first transaction have either lost access to them or they are no more not until some wallets which have been dormant for more than a decade recently wake up and move millions of dollars worth of bitcoin. 

I don't consider any bitcoin entirely lost unless they are sent to a burn address where there is no private key to access them.

bitcoin is a sort of coin and it is not a token.

You did not understand difference between coin and token. A coin is a native currency on its own blockchain, for example bitcoin is a coin and native currency of Bitcoin blockchain. ETH is a native currency of Ethereum blockchain so it is a coin too.

Other altcoins don't have their own blockchains and have to be deployed on infrastructural blockchains like Ethereum, BSC so they are tokens.

Definition of tokens. (https://bitcointalk.org/index.php?topic=2251834.0)

About figures of lost and unrecoverable bitcoins, it is only estimated figure and there is inaccuracy as we can not know about people behind those coins and whether they actually lost access to those coins.

Lots of accounts from the early days lost their money. Maybe from the silk road days and there ould also be mul;tiple reasons why they lost their coins like they got hacked or something or just lost their keys or perhaps like the title said they coudl be Dead! I wish the miner rewards were as plentiful and good back in those good!!!

I agree on a lot of bitcoin being lost forever and if we include the near 5% of coins of Satoshi Nakamoto, it would be over 20%. Theoretically, we'd still keep on losing coins and the supply of bitcoin keeps on decreasing. The effective supply could be around 15 million and might never increase.

It's both fascinating and scary at the same time. The obvious inflation of price is expected which would make the investors happy and the miner motivated to keep mining the coin but there are many dangers that bitcoin could get into from inside and outside if the price keeps on increasing. Price manipulations, Government controls and a potential ECDSA attack in future could threaten bitcoin and its well being. 

I don't really believe the number and I think it's impossible to know the exact amount of bitcoin lost but like satoshi said, just consider it will make other people's bitcoin worth slightly more.
I'm sure there are also bitcoins that scattered across addresses being forgotten by its owner because the amount is low so they don't care. It will stack up to certain amount eventually.

The correct term to use for bitcoin is "coin" and not "token.

In any case, what you are saying is one of the most common statements that people regularly make and you can find out about it under the keyword "lost coins". The numbers you hear which are in the millions, is not accurate and is only speculative. And majority of the coins they are counting as "lost" are simply coins that have not moved for a very long time.

Here is another keyword you can see: "satoshi era coins moved after many years".
These coins are NOT lost, the owners just don't see any reason to move them even though they have the private key to those coins and can spend them any time they wish.
For example I myself have some small amount of coins I've acquired back in 2014 (11 years ago) that I have not touched to this day and have no plans to do so. These speculators count them as "lost" and count me as "dead" :P

With all that said, your conclusion is correct though. Any coins lost is contributing to the scarcity of bitcoin, which makes the rest that much more valuable.

I dont think its as high as 20%. The way they came up with that number is misleading. What they are doing is assuming that any wallet that hasn't had a transaction in 2009 or early 2010 till now, must be lost because why wouldn't the owner spend the money by now. However as we have previously seen every few months there are many times when a wallet from 2010 has finally moved those coins. I think last year we had even a wallet from 2009 that finally started to move its coins.

Sure the older the wallet and the longer it sits idle one can assume that its lost, but we cannot prove it in anyway. Look at that top 3 wallet on the rich list, its from the Mtgox hack, hasnt been since like 2012? Does it mean the keys were lost? No clue. So we cant just state that 20% are lost because they weren't moved recently. I think 10-12.5% is a more accurate figure.

In other word, the Bitcoin founder called lost bitcoins as donations to everyone and it's just true. Knowing lost coins is donation to everyone is enough without demand to know exactly which figure of lost bitcoins is.

Knowing this fact, we will feel more important to make usable wallet backups and make sure that we can recover our wallets from wallet backups.
How to back up a seed phrase? (https://blog.lopp.net/how-to-back-up-a-seed-phrase/)

This is just lazy generalization of a more nuanced reality. Also many people lose total control of their funds due to some negligence and its crazy to assume that those 20% are really owned by dead people. Also there are many instances that those people  are holding their Bitcoin and for now they don't have plans to sell.

Some want to create catchy headlines and want to get some views since somehow these kind of statements would provably make people curious to check if this situation really happened.

Also don't call Bitcoin as a token since its like you are degrading it. Better correct it and mentioned coin since this is more better than any other tokens in the market.

Whether those people actually lost their bitcoin, is not too important with you. If they lost, they donated something to every bitcoiners including you if you have bitcoins. However there is another more important thing for you, lesson, which you can learn from their bitcoin loss story.

Learning about importance of wallet backups, and make sure that you always can have wallet backups for wallet recovery anytime in the future. If you don't have wallet backups, you will not be able to recover your wallet if the original wallet was broken, lost with whatever reason. Then, you will become another person, with another story contributes to Bitcoin loss story series.

I’ll like to correct an impression before it spreads like a wild truth.
Bitcoin is not a token. There is a key difference between tokens and coins. You can refer to Bitcoin in the coin context but, not as a token.

What’s the key difference between coin and tokens;
Coins exists on their individual blockchains and uses its base currencies as fees
While, tokens do exist on existing blockchains native to other coins and uses the native coin as gas fees.

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There are a lot of coins that are lost to the system due to several reasons but, it’s hard to say if majority of these coins are lost due to the wallet owners being deceased. From time to time to time, we do witness the reactivation of long term inactive wallets. These could still be the case of some of these wallets when the owners presume is right or find their keys. In either case, it still promotes the scarcity of Bitcoin.

Seems to be a bit high but a fair number. Some are known lost, others have been reported as lost so we have to take people at their words. I mean I can report an address that I have not moved in 12+ years at this point as lost and he 0.1BTC lost and people would probably believe me. So add that up amongst everyone who holds coins and you can get to a big number.

-Dave

Everyone definitely benefits from this even if we can't be reasonably certain about the exact number that is lost.

Yeah I think we can't be certain about the validity of some of this data. Just because some coins have not moved for a long time and someone states that they are lost that does not prove anything really. For unrecoverable coins I would not be so sure. They may be unrecoverable today but they may be recoverable in the future, like Satoshi's coins. Perhaps there are certain technological methods that make some coins absolutely unrecoverable forever?

The statistics might be incorrect because they may have been presented in a speculative manner, many holders might refuse to move their coins for a long period of time and people will start bringing up false statistics and count those that haven't moved their coins for a long period of time as dead people.Personally,I hardly believe statistics without solid evidence,Op you would have dropped the link of this information about the statistics of lost bitcoins for more clarity.Nevertheless, it's very crucial to manage your private keys with absolute care because whatever coin that has been lost as a result of carelessness can never be restored.

No one has been able to give the exact statistics of this yet because many accounts have been inactive since the Satoshi era, but occasionally it is seen that the account becomes active and transfers BTC. So, we cannot definitely call those that are inactive inactive or dead accounts. It is possible that they became active and transferred Bitcoin after a few years. There are some uncertain possibilities, such as no one can say for sure whether Satoshi himself is alive or dead, so we can assume Satoshi's account is dead or we can assume it is alive. So the exact number of dead accounts has not been confirmed anywhere yet. However, it must be admitted that the more the number of dead accounts increases, the more positive the impact will be on the Bitcoin market, meaning that if the supply decreases, it is definitely good for the Bitcoin market.

Many Bitcoin has been lost and will remain lost for ever because the owners have lost full access to the private keys of those addresses but there's no data records that have given account of the percentage of dead Bitcoiners. It can be true that some persons have lost their life, and their Bitcoin can not be accessed forever but many people that have lost thousands of their Bitcoin are still alive, so I don't believe almost 20% of total circulating supply of Bitcoin is own by dead investors. Bitcoin is just 16 years, not too old that too many investors holding up to 20% total supply would just die in a short time like that. It could be possible but I'm not sure and I don't believe it.

Not might be, but it is surely in accurate, and we only don't know how in acurate it is.

Don't feel confused, I say it is certainly in accurate because on chain transactions, whale alerts as well as media shown us many times that very old bitcoins were moved while those coins considered as lost bitcoins. It's enough evidence for inaccuracy of any figure on lost bitcoins, it's inaccurate forever as you can not control actions of the others so they can have access to their coins, just have no need to move those coins even in many years.

It is more chance of losing bitcoins in the past by don't make wallet backups but in 2025 for example, with many warnings about this risk, many education resources for learning about wallet backups, probability of people losing bitcoins by lacking wallet backups is smaller than the past, but there will be people losing bitcoins this way, while there are investors who hold their bitcoin long term without movement in many years in the future.

20% of the total Bitcoin is lost or unrecoverable, this estimate is made according to onchain analysis ! I have also read many new articles this year that say the number of lost coins is between 11 to 18 %

In fact, some analysts use even larger criteria, like- inactive wallets for more than 5 + years to estimate that 20 % or more of coins are effectively removed from circulation.
So I would say the exact percentage lost is unknown. Analysis alone cannot tell whether a wallet is dormant or permanently lost.

In fact, the fewer coins actively circulating the stronger the scarcity tailwind, also Bitcoins value will increase. for these inaccessible private keys the effective supply will decrease. So I would say when supply is scarcer than demand it is a bullish signal.

Another thing I would like to say is that if you lose the private key, the coin cannot be recovered in any way, so the case of losing a coin due to our error shows that there is a serious responsibility in taking self custody.

So yeah  this is likely a bullish factor for Bitcoins longterm supply/demand dynamic. however dont think of 20 % lost forever as a hard number, its just an estimate, with huge error bars

First of all, you should try to understand that bitcoin is not some sort of token or meme coin.
However, I think the reason why many people have lost access to their Bitcoin is basically because they didn't expect Bitcoin to worth the price it worth today. Some lost fath on Bitcoin during it earlier age. They probably just bought Bitcoin then because it's value was really low and they can afford it without spending much or breaking their bank account. Actually, I don't really know how many Bitcoin has been lost from those who no longer have access to their wallets based on carelessness but you should have shared the link on your thread so that[ we can check for ourselves.

The exact figure of dead Bitcoin is 20%, how do I know if it is correct? However, it could be more or less than that. I don't know the exact ratio, you and I, it's all based on assumptions. The supply of Bitcoin is 21 million, or 1.1 million Satoshis. If you assume that wallets with dead wallets are dead, then the statistics could be more than twenty percent. However, as the world becomes more familiar with Bitcoin and its popularity spreads among people, the price of Bitcoin will increase. However, dead wallets cannot be directly said to be dead because they can wake up at any time.

More than 93% of the 21 million bitcoins total supply has already been mined which means if we are to go by the statistics you presented, it will be about 73% bitcoins that are circulation and let us assume that people who lost access to their wallet by losing their seed and passphrases are among the 20%, it could be true, maybe not but if it true that means that they will be included with Satoshi's bitcoins that may not be touched forever. However, since some wallets are just dormant and maybe reactivated in the future, we can't just assume that those wallets belongs to dead people.

You’ve got a blockchain where pseudonymity is the norm. Yes there are a few wallets known to belong to dead people or to specific people/companies (eg Binance wallets) but there’s no way any of us can know how much of it is dead/stagnant Bitcoin. And any prediction is as precise as these other threads where some people are betting on Satoshi’s return.

It’s actually true that a large portion of Bitcoin has already been mined, and while some of it is definitely lost forever, it’s hard to say exactly how much. Many wallets might actually be inactive for now, but maybe the owners are waiting for the right time to move their coins, or maybe they forgot about them. And as for Satoshi bitcoins, those are most likely never going to be touched, which does make the circulating supply even smaller. But just like you said, we can’t assume every dormant wallet is gone for good. Some could still come back to life oneday.

I don't think that there can be an accurate data to determine how many Bitcoin that are actually lost forever so we shouldn't assume without facts about any amount and if they belonged to the living or dead people. Like the Satoshi stash there are people who haven't seen a good reason to move their Bitcoin and we cannot assume that their Bitcoin are lost or stolen. Bitcoin is decentralized if it's held through none custodial wallets and we shouldn't be surprised if a dormant Bitcoin wallet comes to life and the coins inside were moved. Despite the amount of Bitcoin that will be lost forever and becomes donation to the network I hope that the remaining amount in circulation will keep it going strong m

This is just an estimate because nobody can ascertain the accurate figure. There used to be occasional reports of perceived lost coins being moved to an exchange or another wallet. Such threads are also common in this forum. Some of these coins might still be under the control of their owners. However, I think many coins have been lost since some early owners lost their coins, as they never knew the coin would go this far.

Bitcoin is not a token, it's a coin, you need to distinguish between coins and tokens. and regarding what you said, we simply don't know the exact amount of lost Bitcoin, what you heard might just be an estimate or speculation from people, because there's no definitive data about the total amount of lost coins, what people are doing is simply estimating that a certain number of wallets haven't moved for several years, even though those wallets could simply be holding Bitcoin long-term. but lost coins do effectively reduce the amount of Bitcoin available in the market, and that makes Bitcoin even more valuable.

Yes, we have no idea how many people exactly are dead, that is the "good" thing about bitcoin because we do not know who owns which wallet. Most famously, bitcoin itself was created by satoshi and god knows how much he has, we know "some" of his bitcoins but not all, there isn't like a single wallet address with all his money that we can check. Some say he has 1 million bitcoins, some say it's more logical to assume it would be near half a million of them. We do not know even him, so it's impossible to know others as well.

So it is not going to be a big deal, we should be considering this as irregular data at best. Obviously, one thing we know, the number will not go down, it will go up, we will have more and more people dead and irrecoverable addresses will grow.

Okay, so it really boils down to how these numbers are figured out.  It is a common, widely quoted estimate that around 3.7 to 4 million BTC are gone for good.  That number usually comes from companies like Chainalysis or other researchers, who keep an eye on wallets that havent been touched since Bitcoin was just starting out.  But the thing is, you cant really know if a private key is lost/destroyed or not; all you can tell is that the coins havent moved for a long time.  So, just because they are sitting there doesnt mean they are actually out of the picture for good.

Yes, just think of them that they're all permanently burn and they have lessened the total supply of Bitcoin and even in the circulation in the economy. And that makes it more scarce as satoshi said, it will be treated as a donation to the community as it preserves wealth and value of it. Satoshi did initiated it and those who have bitcoin that either forgotten or no longer with us, they have served it with the same purpose. It will continue to grow the number of bitcoins that are gone forever which is in favor of the ones that are left here.

This also means those coins will never be in used and that means nobody will be able to spend those coins in buying things or paying for services and that isn't good. Bitcoin isn't all about scarcity but about adoption and we need every Bitcoin to be available for spending to achieve full adoption. People are getting carried away about hodling Bitcoin and and not spending it and I think that's a weird mindset. Bitcoin should be spend more and this will create more awareness about Bitcoin instead of most people just holding Bitcoin without it doing anything for years in our wallets. I think the statistics isn't true but what the statistics is trying to prove isn't a lie that alot of Bitcoin will never be spend.

Few bitcoin owners are dead no doubt,
But many are effectively lost and some got trapped in wallets with unrecoverable passkeys.
This artificial scarcity exacerbated by neglectful owners who dismissed bitcoin potential, fuels long time price stability.
Millions of coins that are being abandoned in blockchain graveyards, reducing circulating supply and amplifying the asset deflationary nature
The irony: what was once an oversight e.g(“I will get back to it later “) now shapes bitcoin economy future.

You know im sure that we will see some crazy stories pop up in the future with treasure hunts and everything to find the long lost keys of so and so. There will be movies about it and stuff , because I agree one day someone could find those keys somehow even if they are dead even though the odds do seem slim

Well, for me, I think your stats are correct but this does not mean we should actually be comfortable with the fact that there are dead people whose stash of bitcoin remain on the blockchain while their families may not even know that their dead son or daughter, father or mother, sibling, relative has a number of bitcoin stashed online and it's worth millions of dollars (probably), while they (the family of the dead) are there in the real world probably struggling with poverty..

This is one fear I've always had about crypto in general and not just bitcoin, I don't want to hustle of this finish, hold a number of bitcoins which my family isn't aware of, and neither do they have the keys to the wallet, then one day, something happens to me unexpectedly which lead to my passing on, maybe an accident or simply sleeping and not waking up, then all the bitcoins I've struggled to accumulate will remain online forever with absolutely no means of family getting access to it, this is absolutely heartbreaking and it's another reminder for us all to think about things like this and plan accordingly..

So by speculative you and other Satoshi era bitcoin holders with untouched wallets are dead ;D. And so the only time it would be confirmed untrue that such coins categorised as coins of people who are dead as a result of their wallet remaining untouched is when the coins get moved?! Hmmm I see now.

This brings in mind the topic of quantum computers speculated to be built with a powerful tech that it can brute force into bitcoin wallets. Besides what I was thinking that it could serve as a threat to bitcoin holders being vulnerable of losing their coins with the existence of such tool assuming this was feasible. But on the other hand I want to know, if the machine being put into good use in recovery of lost bitcoins, wouldn't it help slowdown  that bitcoin scarcity we're looking forward in future?

Because for me, I think it's better we have access to all 21 millions bitcoin because even as that there's still going to be a scarcity in the distant future considering the total world population to the total cap supply of bitcoin.

Yeah it's sad to learn that a huge amount of bitcoin has been lost. It's cause of earlier stage mining bitcoin was easy , lot's of people started mining for fun, maybe one or two day or couple of week mined bitcoin and gets busy with life. Didn't checked anymore , those are the bitcoin lost. They forgot or their device got banned. If you go through our forum technical section you would probably found bunch of thred/topic with title that they lost password help for recover. Some found lost bitcoin.dat file on their father's/relatives old computer.

It's teaches us how important it is to manage your wallet security properly. You would never know even a penny could make you millionaire.

A couple of things regarding this "concern":

• We have no clue how many people self-custody bitcoin, and thus, absolutely no idea how many of them are dead.
• Even if we did know how many people own bitcoin, there's still no reputable estimation on how many bitcoin they own.
• Even if 90% of the supply was unrecoverable, it'd change nothing about the underlying economics and its functionality as peer-to-peer cash.

So don't worry.

People just make assumptions base on what they think, they didn't even make an attempt to make it related with maybe utxo that has not been spent in many years, they just assumed that 20% are unspend able, that's billions of dollars that I refused to believe. The owners of those coins will be laughing in one side by the time they are ready to sell their coins, it doesn't make sense to assume as market speculation. Some coins in the last 14 years are been moved recently.

What if the people they thought are dead are not dead, maybe the people they have behind are holding the coins base on the promise the onwer said to them. What if it's their will to leave the coin for some years until a particular time is reach. You never can tell because how old is even Bitcoin that we are making different speculations over something that is just 15 years old, that's a short time compared to the likes of Gold and steal.

Understand the pizza example. Makes no difference what BTC is no longer usable. The remaining accessible amount continues to serve the exact same purpose. And indeed, any demand for BTC will be reflected in an even higher price, due to an absence of available sellers.

By the way, Michael Saylor has said he will, when he dies, not pass on the keys to his privately held BTC, thus essentially donating value to every other existing holder.

https://www.talkimg.com/images/2025/10/21/UM0NWg.jpeg

Here is an estimated allocation for a total supply of 21 million Bitcoins, with 17.6% of Bitcoins being lost forever. Now the question is, if Satoshi is alive, his Bitcoins will have to be kept separately, but if he is dead, his Bitcoins will be directly added to the lost Bitcoins. If the total Bitcoin in Satoshi's wallet is 5.2% and all the Bitcoins lost combined are 17.6%, then the loss becomes approximately 22.8%. So the total remaining Bitcoin is 87.2% of the total supply, meaning that excluding the lost Bitcoins, the total supply of Bitcoins stands at 18.312 million.

https://x.com/saylordocs/status/1980543577320222986?t=2Ls5--czHGfkefvK4r9sVg&s=19

Compare it with the gold. Lots of gold was lost in the oceans. Lots of treasures were hidden with dead people. You can get new gold or try to find the lost. Same with BTC. You can mine it or try to hack these wallets.
If someone get it today - it can seriously decrease BTC price. But for a long distance nothing change - the price would grow up again.

These threads come and go but they are not useful at all. These estimations are based on flawed assumptions. We can't be sure at all and even if there are cases where someone claims that the coins are lost it is still not proof that it is so. As regards to your claim regarding the supply, even if it was 99% it would not change anything about Bitcoin. I guess most people who open these threads must not understand that.

As I said, these are estimates that are based on many assumptions. The reality of the matter is that nobody can objectively know whether coins are lost or not in most cases except the owner. And the owner has no objective means of proving that coins are lost to others. It is based only on trust of their words, trust which Bitcoin was designed to eliminate. Don't believe these stories too much and don't overestimate the significance of this.

Yes, it is true that this is actually a hypothetical statistic where no one can accurately represent which wallets are alive and which are dead. Accounts from the Satoshi era that have been declared dead are still active and occasionally trade tokens. So it is not realistic to declare Satoshi era accounts, especially those that have been inactive for a long time, as those wallets can become active at any time. So no matter how much we represent the number of lost Bitcoins, it is never possible to determine the exact number.

You shouldn't trust or believe that information unless it's proven.
By the way, bitcoins remaining permanently in user's account has nothing to do with immutability...That should be the inability of another user to access the bitcoins without the owner's keys unlike how bank workers or centralized exchanges could access people's funds with or without their access keys or login info if they want to. While immutability is about preventing changes to a data or information even by the one who controls it.


It's the responsibility of a Bitcoin holder to ensure his/her coins get to another person such as a relative, after death.  Even in physical world, money or precious metal maybe lost forever if the owners did not reveal where they were stored to relatives before death.

And already existing feature like timelock could be used to transfer access of bitcoins to others after the death of their owners. We can also implement more of such features on Bitcoin, or develop ours, or use Bitcoin inheritance services

I think OP read the data from bitesizebitcoin (https://www.bitesizebitcoin.org/learn-bitcoin/bitcoin-statistics/how-much-bitcoin-is-lost?); according to them, 20% of Bitcoin is unrecoverable.


However, according to Ledger (https://www.ledger.com/academy/topics/economics-and-regulation/how-many-bitcoin-are-lost-ledger?) analysts, it's approximately 11–18%, so we can assume it's 20% as well. I can't find any exact data from the trusted sources. Personally I don't expect to lose Bitcoin forever that is unrecoverable either for me or any other Bitcoin holders. But if accidentally lost, then it should consider rewards for whole Bitcoin holders. Because lost Bitcoin is reduced from the circulation supply and from the total supply as well since it will never be covered.

We can die anytime; anyone can't be assured to live for a second. So we must have to think about our holding. It must be used by our next generation; otherwise, it will be gone forever. At least one of the family members should know you are using crypto and should be trained very well on how to recover it after you pass away. But definitely you have to secure your wallet seed on your way. Not share with him, just save in a safe place, but it should be findable after passing away.

Maybe in 50 or 100 years quantum computing becomes capable of brute-forcing legacy keys (today's keys) that were never traded in for newly developed quantum-proof keys. So current (alive) bitcoin owners at that time will be secure from quantum hacks, but all the coins owned by dead people will be recovered. This could cause a massive drop in price, as 20% (or by then, 50% or more) of existing bitcoins thought lost forever are suddenly dumped on markets.

It's very much posible and the fact that some sections of society have trust issue's with their partners to the point of them  decideing to keep their crypto investments to themselves(secret) even when they know that without that key those coins are lost forever unless some easy to crack password was used then they can get to them, otherwise move on those coins are gone.

And I suspect the bigger chunk could have come from the first generation of Holders that bought bitcoins at the price of peanut's.

Nobody can know exactly how much is lost. The stats different sites will give you depend on their criteria for lost coins. Some will for instance say that coins that don't move for over 5 years must be lost, but I own cons that haven't moved since 2018, so those must be lost according to them, right?

We can safely assume that coins that haven't moved for 10 years are lost. Even if some of it can be recovered and actually go back to circulation it's going to be a very small number. IMO it's less than 20%, but we'll eventually get there since coins are being lost every day.

It would be difficult to confirm the truth, as many addresses are difficult to identify the owner, and whether they are still alive or not. Even if someone conducted in-depth research involving on-chain activity, it would still be difficult to prove it definitively, and they might only get guesswork (possibly temporary), and it is possible that the wallet might become active again after a long period of inactivity.

Self-custody isn't inherently dangerous, as long as someone can secure their wallet, perform a series of secure backups, avoid careless actions, or bequeath their wallet to people they trust (meaning inheritances that have conditions upon the owner death). So, I think these methods are solutions to the possibilities that could arise when someone practices self-custody. Essentially, we must consider all possible outcomes to avoid unwanted consequences, especially after we are gone. By the way, we also need to know, or discuss such matters as valuable lessons for ourselves, because learning from the experiences of others is a wise practice.

The Bitcoin that is lost to missing or misplaced private keys, dormant or deceased person wallets and even Satoshi's lost coins make up for this amount according to expert analysis and one revelation is that they are still visible on the blockchain, but they are sometimes efficiently removed from the circulating supply for clarity.

Those lost coins also do more to make the supply of Bitcoin scarce seeing that there is only 21 million of the total expected value of supply by 2140 to be mined.

I don't think those that are confiscated or seized by the government for fraud or money laundering concerns are among this 20% so mentioned because they all make up the Bitcoin reserve banks in a country like the U.S and it isn't an unrecoverable asset by the government.
 
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A Bitcoin price drop resulting from the sale of recoverable Bitcoins, as you describe, is indeed a very plausible occurrence, as Bitcoin is still experiencing price drops, not to mention the fact that Bitcoin has already been successfully recovered. Therefore, this is a common occurrence that Bitcoin holders need not fear, as Bitcoin can eventually rebound after the price drop is over. And if this were to actually happen to Bitcoin, it could be quite an interesting story in Bitcoin history and among Bitcoin holders, especially those who are able to recover Bitcoins from the wallets of deceased individuals.