Intermediate
Number of bitcoins in circulation: Deciphering the actual BTC supply
The number of bitcoins in circulation corresponds to the BTC actually available on the market, with a cap fixed once and for all at 21 million units. Today, approximately 19.83 million have been mined, but a significant portion is lost or held without being exchanged. This limited supply , enshrined in the Bitcoin protocol itself, contrasts sharply with traditional currencies, which can be printed in unlimited quantities by central banks.
It is precisely this fixed cap that gives Bitcoin its long -term value preservation potential . Faced with the inflation of fiat currencies, whose purchasing power continues to erode, Bitcoin is increasingly attracting those seeking a scarce, unmanipulated, and deflationary asset.
To better understand this dynamic, feel free to explore our inflation calculator between 2 dates which allows you to visualize concretely how much the currency loses in value over the years.
Table of contents
Number of bitcoins in circulation: 2 main categories of bitcoins
To better understand how Bitcoin works, it is essential to distinguish between the several categories of coins that make up the overall supply. This breakdown allows us to assess the liquidity, volatility, and real value of the asset.
Active Supply: bitcoins in dynamic circulation
The Active Supply represents the bitcoins used in recent transactions. These coins are regularly used in exchanges, which contributes to market liquidity.
In other words, they reflect economic activity on the blockchain . Studies conducted by Glassnode and ARK Invest, notably via the Cointime Economics model, indicate that approximately 15 to 16 million BTC (or nearly 71 to 76% of the mined supply) fall into this category.
Vaulted Supply: Dormant or Lost bitcoins
The Vaulted Supply includes bitcoins that have remained inactive for extended periods. They have not been used for transactions. This category includes:
- Coins that have never been moved, including mining rewards retained by miners.
- The "Probably Lost Supply" refers to bitcoins that have not moved since the beginning of Bitcoin (often since 2010) and whose access has been lost.
According to the best estimates based on the Cointime Economics approach, the Vaulted Supply would represent approximately 18.5 to 23.2% of the total supply, or between 3.9 and 4.9 million BTC.
Miner Unspent Supply: Coins never spent by miners
Another important component of the supply consists of bitcoins that were allocated to miners when blocks were created but have never been transferred. These coins, called Miner Unspent Supply , represent approximately 1.77 million BTC , which is equivalent to nearly 8.5% of the total.
Probably Lost Supply: The bitcoins are permanently lost
The Probably Lost Supply refers to BTC that hasn't been used for a very long time, often since 2010. These coins are considered permanently lost because their owners have likely misplaced their private keys. Estimates place this share at around 1.46 million BTC , or approximately 7% of the total supply.
Upper Bound Estimation: The upper bound of inactive corners
To better understand the phenomenon, some models offer a maximum estimate, called the Upper Bound Estimation . This model incorporates all inactive coins and suggests that, at most, up to 6.87 million BTC (approximately 32.7% of the total supply) could be inactive or lost.
Number of bitcoins in circulation: Analysis methodology, The Cointime Economics framework
To dissect the distribution of Bitcoin's supply, experts like James Check and David Puell developed the Cointime Economics . This framework is based on the idea of measuring the time a bitcoin remains held without being moved, using a unit of measurement called a coinblock .
Each bitcoin generates coinblocks as long as it is stored in a wallet .
When the coin is spent, these coinblocks are "destroyed". This approach provides two major indicators:
- Active Supply corresponds to the sum of bitcoins whose cointime has been consumed by recent transactions.
- Vaulted Supply refers to bitcoins that accumulate cointime without being spent.
This model offers a more refined and dynamic view of the Bitcoin economy, clearly distinguishing the actually available supply from coins that are stored or lost.
Summary table of supply distribution
To better visualize this distribution, here is a summary table based on the research of James Check and David Puell:
Bitcoin supply distribution
| Category | Description | Estimate (in millions of BTC) | Approximate percentage |
|---|---|---|---|
| Active Supply | Bitcoins used in recent transactions | 15 to 16 | 71 to 76% |
| Vaulted Supply | Inactive or dormant coins (including lost coins) | 3.9 to 4.9 | 18.5 to 23.2% |
| Miner Unspent Supply | Coins allocated to miners that have never been spent | Approximately 1.77 | 8,5 % |
| Probably Lost Supply | Coins inactive since 2010, considered lost | Approximately 1.46 | 7 % |
| Upper Bound Estimate | Maximum estimate of lost/dormant corners | Up to 6.87 | 32,7 % |
This chart illustrates how, even with nearly 21 million BTC mined, a significant portion remains inactive or lost, thus affecting the supply available for trading.
Number of bitcoins in circulation: Technical analysis without unnecessary jargon
To facilitate understanding, here are some simple explanations of the technical terms used in this analysis:
Cointime and Coinblocks
Cointime combines the volume of bitcoins and the length of time they remain in a wallet. Coinblocks are the units of measurement for cointime. As long as a bitcoin is not spent, it generates coinblocks, which allows you to assess its level of inactivity or activity.
Active Supply vs. Vaulted Supply
The distinction between Active Supply and Vaulted Supply is essential to understanding the actual supply:
- Active Supply : These are the bitcoins that are actively circulating, used in recent transactions, and that directly influence the market.
- Vaulted Supply : These are bitcoins stored long-term, often inaccessible for daily trading, which reduces the amount of BTC available for trading .
Number of bitcoins in circulation: The importance of this distribution for the market
number of bitcoins in circulation is divided between Active Supply and Vaulted Supply has several implications:
- Liquidity : A larger active supply means that many bitcoins are available for trading, thus increasing liquidity. Conversely, a large vaulted supply reduces the amount of BTC that can be used.
- Volatility : A limited supply of bitcoins can lead to significant price fluctuations during periods of high demand. The presence of numerous dormant coins exacerbates scarcity.
- Valuation : The scarcity of bitcoins can drive up their price. Investors welcome a limited supply, which reinforces Bitcoin's perception as a store of value.
- Investment strategy : To make informed decisions, it is essential to know how much BTC is actually in circulation and available for trading. On-chain analytics therefore offers a strategic advantage.
Number of bitcoins in circulation: Technical details for enthusiasts
The Cointime Economics Method in Depth
The Cointime Economics model relies on precise measurements of bitcoinsholding times. With each validated block, each unspent bitcoin generates a quantity of coinblocks proportional to its value and the duration it is held. When these bitcoins are eventually spent, the accumulated cointime is "destroyed," demonstrating their mobilization.
This approach allows us to differentiate between actively traded bitcoins and those that remain inactive. Based on this methodology, in-depth studies indicate that approximately 15 to 16 million BTC are regularly used, while 3.9 to 4.9 million remain dormant. These findings, corroborated by research from Glassnode and ARK Invest, provide a clear overview of the Bitcoin economy.
Limitations and uncertainties of the estimates
It is important to note that estimates of the number of bitcoins in circulation are based on several assumptions. For example, inactivity thresholds (5 years, 7 years, or more) can vary between studies. Some models offer a lower bound (approximately 1.774 million BTC for certain inactive coins) and an upper bound of up to 6.87 million BTC .
These variations illustrate the complexity of accurately assessing coin inactivity on a decentralized blockchain and the need to use multiple methods to obtain a reliable estimate.
Number of bitcoins in circulation: References and further studies
The analyses presented here are based on the Cointime Economics by James Check and David Puell, a key reference in on-chain Bitcoin research. Other resources such as Glassnode Studio and ARK Invest reports also offer up-to-date and detailed data.
This research provides a better understanding of how the distribution between active and vaulted supply influences Bitcoin's liquidity, volatility, and valuation. Indicators such as the cointime-adjusted inflation rate also illustrate how new BTC issuance dilutes the share of actively traded coins.
Number of bitcoins in circulation: Recommendations for investors and enthusiasts
How to use this data to invest wisely
For any investor or enthusiast looking to enter the world of Bitcoin, it's essential to use these indicators to assess the true state of the market. Understanding that only a portion of the total supply is active allows for better anticipation of price movements. For example, in a market with a high Vaulted Supply, strong demand can lead to a significant price increase due to the scarcity of bitcoins available for exchange.
Best practices in security
Another important point is securing your bitcoins . Since some coins become inactive due to private key , it is imperative to adopt secure storage practices. Using hardware wallets, backing up private keys, and diversifying storage methods are strongly advised.
Number of bitcoins in circulation: Future prospects for Bitcoin
Market evolution and on-chain analysis
The Bitcoin market is evolving rapidly, and the accuracy of on-chain analytics is constantly improving. In the future, new technologies and analytical methods are likely to further refine estimates of the number of bitcoins in circulation . This continuous improvement is crucial for understanding the dynamics of liquidity and volatility in a constantly changing market.
Furthermore, increased transparency and accessibility of on-chain data will help investors track supply movements in real time, allowing them to adapt their strategies to market conditions.
The impact of technological innovations
Innovations in cryptocurrency security and storage should also help reduce the number of permanently lost bitcoins . By improving backup solutions and raising user awareness of best practices, the proportion of vaulted supply could gradually decrease, thereby strengthening overall market liquidity.
These technological developments, combined with increasingly sophisticated on-chain analyses, will allow investors to benefit from a better view of the market and to optimize their buying or selling decisions.
Conclusion on the number of bitcoins in circulation
The number of bitcoins in circulation is not simply the total number of BTC mined. It is a complex indicator that takes into account the distribution between actively traded coins and those that remain inactive or are lost. Thanks to research such as that presented in Cointime Economics, it is possible to distinguish the Active Supply (approximately 15 to 16 million BTC ) from the Vaulted Supply (approximately 3.9 to 4.9 million BTC ), not forgetting the shares allocated to miners or permanently lost coins.
Understanding this distribution is essential for assessing Bitcoin's liquidity, volatility, and true value. For investors, this distinction allows for a better understanding of risks and opportunities, knowing that only a fraction of mined bitcoins is actually available on the market. By adopting rigorous security practices and using on-chain analytics tools, everyone can make more informed investment decisions.
Ultimately, while the overall number of Bitcoins may seem high, the dynamics of the actual supply are far more nuanced. This thorough understanding of the number of bitcoins in circulation and their distribution is essential for anyone wishing to invest in this cryptocurrency or simply follow its developments.
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Yoann
Training engineer, I quickly became interested in the field of finance. Convinced that decentralized finance has a bright future ahead of it, I participate in its democratization by developing Crypternon.
