Bitcoin has crossed a historic landmark in terms of supply, as 85%of the world’s BTC has already been mined.
As of August 1, bitcoin miners have released 17.85 million of the 21 million total BTC supply, which means that 85% of all bitcoin has already been mined. While most investors are focused on next May’s halving event, which will cut block rewards from 12.5 BTC to 6.25 BTC, the actual supply of bitcoin is already nearing its relative maximum.
Satoshi Nakamoto, bitcoin’s creator, called the step-wise production of bitcoin the “best” method of distribution,
“Coins have to get initially distributed somehow, and a constant rate seems like the best formula.”
As outlined in the original whitepaper, bitcoin has a maximum supply of 21 million BTC. Despite the creation of hard forks and other spin-offs, only 21 million BTC will ever be produced--with most reports speculating that 20 - 25% of the supply (4 million BTC) has already been lost or locked in an unrecoverable state.
The limited supply for bitcoin was originally designed as a way to keep the currency's inflation in check. With 3.15 million BTC left to be mined, investors are beginning to make a strong case for the coin’s scarcity, in addition to its potential as a deflationary asset.
Despite being only 15% of the max supply, the next 3 million BTC will take over 100 years to fully mine. With the regular decrease in block rewards, the final bitcoin is expected to be mined in the year 2140, making it a long wait for BTC enthusiasts.
Supply and Demand
Bitcoin price volatility has been on the rise throughout the last month, as cryptoassets come under fire from the regulatory blowback over Facebook’s libra. However, analysts are beginning to look long-term for bullish indicators and settling on the decreased supply.
CNBC’s Joe Kernen predicted on Monday that bitcoin could reach $50,000 by May 2020, when the block reward reduction is expected to occur. Kernen cites investor anticipation over the dwindling reward, in addition to the economics of supply and demand.
Morgan Creek Digital co-founder Anthony ‘Pomp’ Pompliano has also been a proponent of the market scarcity theory. Pomp calls it a good bet that bitcoin’s price will increase as the supply decreases and predicted BTC reaching $100,000 by 2021.