Bitcoin market cap

[JAndelin]

I am confused as to why the bitcoin market cap is published to be (today) about $175 billion.  This is calculated by multiplying the current bitcoin price (~$9500) by the number of bitcoins mined (18,406,000).  Yet it is believed that approximately 30% of all bitcoins ever mined have been lost.  if a private key to a bitcoin address has been lost, then the bitcoin in that address should, in my opinion, be erased from the market cap.  It is published in articles that a bitcoin market cap of $1 trillion would equal around $50,000 per bitcoin.  This is a substantial underestimation.  If you factor in a 30% loss of bitcoin, then a   $1 trillion market cap would equal around $77,000 per bitcoin.  Losing a private key is like throwing a gold coin in the ocean.  It can be argued that the gold coin is still there.  But for all intents and purposes, the gold is non-existent, because it would be impossible to recover.  The point I'm making in this post is that bitcoin is much rarer than published.  There are not 18.4 million bitcoins out there.  There are only around 14 million.

[philipma1957]

 I won't challenge your personal belief about the mined 18 million btc.
I agree that some are lost. Are there 14mill accessible who knows. I don't.

[mk4]

It's because the numbers and percentages of apparently "lost BTC" are just mostly theories and assumptions. We have no data to prove if the numbers are actually true, and it would be more inaccurate to change up the total marketcap using numbers that we are unsure of.

[Darker45]

Who has the capability to know that?

And on what basis should we consider a lost Bitcoin really lost? It seems to me we certainly cannot tell whether a particular address has already lost its private key or not.

As a matter of fact, even an 11 year old dormant Bitcoin could move anytime. And it actually happened just recently.

[btc_angela]

Does it really matter if we have 18 million or 14 million BTC out there? For me it has no gauge whatsoever, and I don't know why people make things complicated. Those coins could be lost forever or it could be found by someone but I don't think it will have a significant effect on the market price. Having 21 million supply is rare already.

[KonstantinosM]

The market cap is kind of a silly number that we like to look at. If somebody tried to sell 10 million bitcoins they couldn't get the spot price, the price would go down a little bit for the first few bitcoins, then there would be less byers and the price would drop, eventually the price would drop down so significantly that I doubt the actual dollar value extracted would be 1/10th of the market cap.


Same goes on the other side, if someone had the entire bitcoin market cap worth of dollars, and tried to buy all the bitcoins, I doubt they could buy a fraction of all of the bitcoins as the price would quickly rise, getting past a million and then 10 million et cetera, I doubt they could even buy 1/10 of the bitcoin with the market cap worth of money.



The only coins that we should possibly exclude from market cap calculations should be provably burned coins. I dont' think there is such a thing as provably lost bitcoin. You can do your own calculations if you want to exclude coins that haven't been moved in x amount of time.

edit: misplaced word/ antonym

[chip1994]

I think the amount of bitcoins lost will not be that many. Not long ago, we heard a hot news that an old wallet that used to mine bitcoins created in 2009 was working again. it has moved 50btc out for sale and many are concerned that many mysterious wallets will revive and continue dumping bitcoin.
The story shows that the other wallets are not dead, they are not activated and we should not be subjective.

[joniboini]

I'd not think too much about the discrepancies. Instead of focusing on the market cap I'd rather see a good volume & depth on trading as that's what pushes the price up or down. There are many examples where tokens/coins with big market cap eventually lose nearly half of its mc simply because the volume is so low.

It's not a really good metric if you want to see market depth. And as mentioned, you can always make your own calculation if you don't agree with it. Be prepared for questions though.

[fiulpro]

I am confused as to why the bitcoin market cap is published to be (today) about $175 billion.  This is calculated by multiplying the current bitcoin price (~$9500) by the number of bitcoins mined (18,406,000).  Yet it is believed that approximately 30% of all bitcoins ever mined have been lost.  if a private key to a bitcoin address has been lost, then the bitcoin in that address should, in my opinion, be erased from the market cap.  It is published in articles that a bitcoin market cap of $1 trillion would equal around $50,000 per bitcoin.  This is a substantial underestimation.  If you factor in a 30% loss of bitcoin, then a   $1 trillion market cap would equal around $77,000 per bitcoin.  Losing a private key is like throwing a gold coin in the ocean.  It can be argued that the gold coin is still there.  But for all intents and purposes, the gold is non-existent, because it would be impossible to recover.  The point I'm making in this post is that bitcoin is much rarer than published.  There are not 18.4 million bitcoins out there.  There are only around 14 million.

The reason why people think that it's lost Bitcoins is : Apparently that wallet has been inactive for a while, we are not really sure of anything. It is not actually possible to get in touch with anyone to confirm that . Who knows if someone is just holding those coins? Who knows if someone just lost their keys and in the near future they can somehow remember it and recover them ?
At the same time there are people who apparently died and someone else tried to steal their coins *Craig Wright* , there can be cases like that too. When any family member discovers the worth they can very easily try and recover since now there is an option of passing on your Bitcoins to some family member, considering it wasn't so in the previous years , I do think wallet company can confirm and do the same.

[Cnut237]

The market cap is kind of a silly number that we like to look at. If somebody tried to sell 10 million bitcoins they couldn't get the spot price, the price would go down a little bit for the first few bitcoins, then there would be less byers and the price would drop, eventually the price would drop down so significantly that I doubt the actual dollar value extracted would be 1/10th of the market cap.

This is the crux of it.
Marketcap = (current trading price of coin) * (total number of coins).

The 'price' is a simplification, a single measure that takes no account of the depth of the order book or the spread of bids/asks; it takes no account of the number of coins that anyone could actually sell at that price. Kind of analogous to the 'present' being just a word to denote the separation of 'the past' and 'the future'.

Similarly the 'total number of coins' is a simplification that takes no account of any coins that might be permanently lost. And it shouldn't need to, because knowledge of the proportion of lost coins should factor into the price. You might imagine that if there is some sudden news that the number of 'lost' bitcoins is vastly higher than previously estimated, this would reduce available supply, and lead to a price increase.

Marketcap is a useful approximation, but no more than that. It shouldn't be considered a perfect barometer of the overall worth of a project.

[batang_bitcoin]

That's not a big deal for me but addressing that can also be informative for some. We all believe or probably the majority are looking forward to the market cap to reach its first trillion. It's what matters and whether you sum up 18M of supply or 14M supply depends on your calculation. The fact that a lot of it has been lost forever and that its giving contribution which makes bitcoin rarer. We only have 21 million and that's what actually matters most.

[South Park]

I am confused as to why the bitcoin market cap is published to be (today) about $175 billion.  This is calculated by multiplying the current bitcoin price (~$9500) by the number of bitcoins mined (18,406,000).  Yet it is believed that approximately 30% of all bitcoins ever mined have been lost.  if a private key to a bitcoin address has been lost, then the bitcoin in that address should, in my opinion, be erased from the market cap.  It is published in articles that a bitcoin market cap of $1 trillion would equal around $50,000 per bitcoin.  This is a substantial underestimation.  If you factor in a 30% loss of bitcoin, then a   $1 trillion market cap would equal around $77,000 per bitcoin.  Losing a private key is like throwing a gold coin in the ocean.  It can be argued that the gold coin is still there.  But for all intents and purposes, the gold is non-existent, because it would be impossible to recover.  The point I'm making in this post is that bitcoin is much rarer than published.  There are not 18.4 million bitcoins out there.  There are only around 14 million.

You bring some good points but you offer no viable alternative to really calculate this number.

There are estimations about the number of coins lost over the years but that is all what they are, coins that could be thought to be lost because they have not moved for years could move at any time if their owners decide to do so, or even if the coins were actually lost at some point the owner could find the seed or the private keys and recover those coins, and finally bitcoins are never truly lost, there is something called address collision which is basically two random people around the world generating the same address, while this is incredibly unlikely, there is always the chance someone could generate the address containing some lost coins and getting them back to the market, as I have said this is very unlikely since there are  2^160 different legacy addresses if I remember correctly.

[mindrust]

Marketcap is a bullshit metric in most cases. I'd rather suggest you to not think too much about it.

Adoption/real world usage is what really matters.

If you bribe CMC and a few other key companies, you can create a bigger marketcap crypto than bitcoin and lots of people will believe it.

[Real_Person]

The market cap is kind of a silly number that we like to look at....

Historically, "market cap" was considered a very silly number. I have seen some of the old threads from when the term first started getting used, and there was a lot of push back against the idea. We all know now the capheads won, but it can still be considered a misleading and inaccurate number.

[mk4]

Marketcap is a bullshit metric in most cases. I'd rather suggest you to not think too much about it.

Adoption/real world usage is what really matters.

If you bribe CMC and a few other key companies, you can create a bigger marketcap crypto than bitcoin and lots of people will believe it.

In bitcoin's case, I'd say it's a decent metric as we know that Bitcoin is decentralized anyway. The bullshitry applies mostly to 99% of altcoins in my opinion(XRP being a perfect example), whereas the company handling the project has ownership of majority of the coins; then the marketcap metric becomes quite inaccurate and misleading.

[mindrust]

Marketcap is a bullshit metric in most cases. I'd rather suggest you to not think too much about it.

Adoption/real world usage is what really matters.

If you bribe CMC and a few other key companies, you can create a bigger marketcap crypto than bitcoin and lots of people will believe it.

In bitcoin's case, I'd say it's a decent metric as we know that Bitcoin is decentralized anyway. The bullshitry applies mostly to 99% of altcoins in my opinion(XRP being a perfect example), whereas the company handling the project has ownership of majority of the coins; then the marketcap metric becomes quite inaccurate and misleading.

Since the other coins have fake marketcap, you can't compare bitcoin's marketcap to the other coins which makes it a useless metric in almost every case.

Maybe it would be useful while comparing bitcoin to gold...

I'd still look for the real world usage. Marketcap feels much like a pissing contest. The outcome is mostly useless.

[stompix]

Yet it is believed that approximately 30% of all bitcoins ever mined have been lost.  

Believed! You can't know for sure if any of those were truly lost.
Remember this?
50 BTC Just Moved for First Time Since 2009
Were those coins part of those 30% people "believed" to be lost?

There are not 18.4 million bitcoins out there.  There are only around 14 million.

So it's 24% and not 30%?  

[BrewMaster]

Does it really matter if we have 18 million or 14 million BTC out there?

4 million bitcoins is about 22% of the current circulating supply. so yes, it does matter a lot if those coins were truly lost because they would be out of circulation and it makes bitcoin effectively 22% more scarce.
but the reality is that everyone who talks about "lost" coins are actually talking about "not-moved" coins. and those coins ARE still in circulation.

[gentlemand]

I think the lost coin figures are humongously over estimated. The ones we can be 100% certain of, burnt coins, publicly declared dead hard drives etc, only number in the tens or low hundreds of thousands. Everything else is fair game. We saw 2009 coins moving recently and I'm sure most people considered them 'lost' until they moved.

I have coins which would probably be regarded as lost because they haven't budged for so long but they are of course fully accessible. I have old .txt files with 10 year old wifi passwords so the idea of everyone losing everything from the early days is ludicrous.

[Sanugarid]

Does it really matter if we have 18 million or 14 million BTC out there?

4 million bitcoins is about 22% of the current circulating supply. so yes, it does matter a lot if those coins were truly lost because they would be out of circulation and it makes bitcoin effectively 22% more scarce.
but the reality is that everyone who talks about "lost" coins are actually talking about "not-moved" coins. and those coins ARE still in circulation.

Is it a good news for the bitcoin? I don't know how to do math but this 22%, if ever those bitcoin was really lost then we are able to keep the price resistance from that point, so those economists who calls it bubble will just eat their words. And yes, we are all confused about this lost bitcoin or 'not-moved' bitcoin or something, but one thing is for sure there will be more "lost" bitcoins in the future and you won't know it.

Some market capitalization from different websites are assumptions, see how different they are each time.