Bitcoin FreeFloat Supply

[dkbit98]

Bitcoin circulating supply shown in Coingecko and CoinMarketCap websites is around 18.62 millions but we know that many Bitcoins are missing and lost forever so blockchain analytics firm Coinmetrics created FreeFloat Supply for Bitcoin to create more realistic supply.
With their methodology calculations it is showing much lower supply with around 14 million Bitcoins, and they believe almost 4 million is gone, and It's not like I am surprised with this but I would like to see how exactly did they calculate this but they don't provide any explanation about this, but they probably excluded all coins that was not moved in several years.

As a result from this they also claim that Bitcoin market cap is much lower than shown on other websites, Coingecko claims around  $707 Billions, and Coinmarketcap around $705 Billions in time of writting this post.

I would not call this website and numbers they show precise or reliable and I know some people are holding and not moving their Bitcoin for years, but it is still nice attempt from them to show more realistic supply image, and that also means that Bitcoin is more valuable.


https://network-charts.coinmetrics.io/#661

[1714854047]

1714854047

[Upgrade00]

Some bitcoins are definitely lost forever, but I do not consider market cap and circulating supply to be relevant figures, so the discrepancy does not matter much.

but it is still nice attempt from them to show more realistic supply image, and that also means that Bitcoin is more valuable.

True, the lower supply would indicate that the ones in circulation are more valuable, but for that to be priced into the exchange markets, wouldn't the exact amounts that are missing need to be confirmed?

[dkbit98]

True, the lower supply would indicate that the ones in circulation are more valuable, but for that to be priced into the exchange markets, wouldn't the exact amounts that are missing need to be confirmed?

You can't confirm and make difference with coins that are missing from coins that are just hibernating, so it is still just a speculation and some percentage of coins can get active at some point of time.
I still think millions of coins are gone forever, but I am not sure if 4 million is correct number.

[mk4]

but I would like to see how exactly did they calculate this but they don't provide any explanation about this, but they probably excluded all coins that was not moved in several years.

Found an answer to your question:



https://coinmetrics.io/introducing-free-float-supply/

While people may deem this metric inaccurate, if I understand this correctly, the goal is just to have an extra separate metric to have an idea on the total supply of bitcoin that's a lot more likely to move sometime in the future and "contribute" to the market through liquidity; and they're really not claiming for this metric to be more "accurate". The same reason why in stocks, we have both Trailing P/E and Forward P/E; whereas both metrics are simply just useful in their own ways but one is not necessarily "better" than the other.

[Ucy]

14 million bitcoins? probably the number of bitcoins that haven't been lost? If that's how they determine it, I wonder how they are able to determined the true number of lost coin and how reliable is the method for determining this. They are probably watching old coins that haven't been moved nor have experienced any kind of activity from their holders since they were owned/stored.

[dothebeats]

We'll never come up with an accurate number of how much bitcoin is actually lost in the void. There are tons of factors to be considered and some of them remains too vague to be included on the calculation e.g. time of the coin being idle. They came up with a pretty low ballpark compared to most of those in the industry, though a given if they added a little something in the mix to get that number.

While people may deem this metric inaccurate, if I understand this correctly, the goal is just to have an extra separate metric to have an idea on the total supply of bitcoin that's a lot more likely to move sometime in the future and "contribute" to the market through liquidity; and they're really not claiming for this metric to be more "accurate". The same reason why in stocks, we have both Trailing P/E and Forward P/E; whereas both metrics are simply just useful in their own ways but one is not necessarily "better" than the other.

It's good that they consider that some of those 'lost' coins may or may not move in the future. In this ecosystem where cold storages are highly encouraged for long-term safekeeping of funds, you cannot really discern between idle coins and coins that cannot be accessed anymore.  Glad that someone doesn't lock out the possibility of coins moving around in the future, especially those that are idle for more than 5 years.

[DaveF]

The issue is they really don't know. Nobody does.
I know someone sitting on 100BTC mined back in the day when you could solo mine. Has not been touched in 10 years. Yes $3.7 MILLION USD give or take at the moment. (minus taxes)
But for now, he does not need it or even want it. Had some really good investment property sales and is now sitting on about that in cash. But looking at it, people would go...not been touched since 2011 must be lost.

There also might be some coins that people just sent into oblivion just now, as I type this. Never going to know till a few years from now when they find out the private key on their paper wallet is screwed up.

So it's all just guesswork.

-Dave

[avikz]

There may be many factors they have undertaken to reach to this figure of 14 million but it's impossible to get to the correct number. Probably they have decided a timeframe and calculated how many bitcoins have not been moved beyond their chosen timeframe. That's one of the efficient ways to estimate the lost bitcoin but again it is impossible to reach to a correct number.

However, the reduced number of freefloat supply definitely means, bitcoin can be more valuable based on current demand. While these kinds of chart or information doesn't usually have much impact on the market but yes, a good thing to know!

[pawanjain]

With their methodology calculations it is showing much lower supply with around 14 million Bitcoins, and they believe almost 4 million is gone, and It's not like I am surprised with this but I would like to see how exactly did they calculate this but they don't provide any explanation about this, but they probably excluded all coins that was not moved in several years.

But that's definitely not the right way to calculate the total supply. Assuming many old timers would have just stored their wallet just like that.
Many would have stored it as collectibles. Many would have stored it in a secure place where they can access it only in emergency cases.
These coins would not have been moved yet should be counted in the circulating supply.
Them, not mentioning the method to calculate their freefloat tells us why we should not be believing them for the number of circulating supply.
There's no correct method proven to find the actual number of bitcoin circulating supply.

[mk4]

But that's definitely not the right way to calculate the total supply.

Because to find a better way to calculate the total supply was never the intention of this metric; and it should've been pretty obvious that that was the case.

https://coinmetrics.io/introducing-free-float-supply/

[Obito]

14 million bitcoins? probably the number of bitcoins that haven't been lost? If that's how they determine it, I wonder how they are able to determined the true number of lost coin and how reliable is the method for determining this. They are probably watching old coins that haven't been moved nor have experienced any kind of activity from their holders since they were owned/stored.

I don't think that any data is accurate, there is a lot of factors to be considered in the first place like is there still an activity in the wallet, did the owners really lost the wallets or it is on hold for long term. Most of the time it is user error but are this really accurate numbers, what if those dead wallets for dead for a reason, what if the owners still know the password to access it but doesn't want to because the owner thinks that it is not the right time.

[davis196]

The correct number of Bitcoins in circulation will always remain a mystery.
Maybe this is actually good for the Bitcoin price growth.I'm not sure how did this Company estimate the exact number of lost Bitcoin to 4 million.I think that the number is lower.Probably 2-3 millions,but I'm not a mathematician and don't know how to calculate this.
The rumors about the Bitcoin market cap being overinflated will continue forever.

[OcTradism]

A few more tools:
https://hodlwave.com/
https://www.lookintobitcoin.com/charts/1-year-hodl-wave/
https://charts.woobull.com/bitcoin-hodl-waves/

They are tools and visual charts are made with estimations and assumptions on hibernated or lost bitcoin. We never know that hibernated bitcoin will be woken up some days or they were lost forever.

The common sense from those tools is to help us realize some fact
- Bad mistakes from people whom don't back up their private key or wallet passwords carefully
- Increase awareness of bitcoin scarcity and magnify the scarcity level by number of lost bitcoin.

[dkbit98]

As we are talking about Bitcoin supply let's check this interesting January research done by Glassnode, showing percentage of Bitcoins owned by addresses and represented as sea animals.
They separated all known exchange and miner entities from this research and it showed that big whales and Humpback are combined holding 31% of Bitcoin supply, and number of whales has increased a lot in 2020 and 2021.
Shrimps, Crabs and Octopus together are holding almost 23% of the supply, while smallest individual percentage of supply is held by Fishes 4.7%

• Shrimps(<1 BTC)
• Crab (1-10 BTC)
• Octopus (10-50 BTC)
• Fish (50-100 BTC)
• Dolphin (100-500 BTC)
• Shark (500-1,000 BTC)
• Whale (1,000-5,000 BTC)
• Humpback (>5,000 BTC)

https://insights.glassnode.com/bitcoin-supply-distribution/

[tranthidung]

https://insights.glassnode.com/bitcoin-supply-distribution/

Thank you for the given article.  

You can check the bitcoin distributions with one of the two and without need to wait for reports from Glassnode. I see Glassnode report has an additional information for miners and exchanges.

• Bitcoin Distributions and Top 10 richest bitcoin addresses (bitinfocharts.com)
• Blockchair.com

[1] Screenshot

[2] How to check with the second one?

• Use queries: q=
• balance: number is for satoshis): balance(100000000..) *
• sort addresses out descendingly: s=balance(desc)

*: You must put .. at the end, to get 1+ BTC address, if you don't use it, the filter gives you result for addresses that has exactly 1 BTC.

1+ BTC: https://blockchair.com/bitcoin/addresses?q=balance(100000000..)&s=balance(desc)#
10+ BTC: https://blockchair.com/bitcoin/addresses?q=balance(1000000000..)&s=balance(desc)#
100000000 is for 100000000 satoshis ~ 1 BTC. Change the number to what you want to filter.
Results:

• 1+ BTC: 828931 addresses
• 10+ BTC: 150714 addresses

[gurunanakji777]

Yes, Most probably they add those accounts that did not move their Bitcoins for several years. Even I believe some of us who created bitcoin Ac in the last 2-3 years also lost their keys in computers or lost it by negligency. We can assume some little plus-minus in lost 4 million coins but can not fully rely on that too.