Hi,
I am a miner in the cryptocurrency universe since late 2012.
I have discovered steemit lately so i would like to share a thought regarding the BTC price, so i can get your feedback on the matter.
Bitcoin Market Capacity
Today, the Market capacity for Bitcoin is 47,769,994,026 USD.
A gentle reminder on how market capacity is calculated :
Market capactity = Price x Circulating Supply
So let's do our maths :
2915.48 x 16384950 = 47769994026
So far ... so good, everything looks normal.
Bitcoin Circulating Supply
The main problem i see with the bitcoin price, is that it uses the Circulating Supply which is based on the Bitcoin algorithm that will generate bitcoins until it gets to 21000000 BTC units.
If, as of today, 16384950 BTC have been generated so far (no doubts about that), how much have been lost/destroyed by humans mistakes ?
Few examples :
- Wallet creation + passphrase lost : [Bitcointalk] or [Reddit]
- Formatted computers + no backups : [Bitcointalk] or [Reddit]
- All the 0.0xxxxx that were left abandonned or can't be withdraw from pools or exchanges as the amounts are too low.
One of the most famous story is the one from that guy throwing his former laptop with 4 millions pounds worth of BTC on it : [The Guardian]
According to the various searchs i have made, i would say that between 30% - 40% of the 16384950 BTC generated so far have been lost forever.
It sounds like a worst case scenario, but i don't think it is.
New cryptocurrencies are not that much impacted with 'destroyed coins' but stories of lost coins are still a thing, like Quadriga that sent 60000 ETH into a black hole lately [Reddit]
Bitcoin Possible Prices Correction
Without touching the actual price
30% lost coins
Let's say 30% of the BTC have been lost.
The new circulating supply would be : 11469465 BTC
11469465 x 2915.48 = 33,438,995,818
The market capacity with this fix would be : 33,438,995,818 USD
40% lost coins
Let's say 40% of the BTC have been lost.
The new circulating supply would be : 9830907 BTC
9830907 x 2915.48 = 28,661,812,740
The market capacity with this fix would be : 28,661,812,740 USD.
Without touching the actual Market Capacity
30% lost coins
47769994026 / 11469465 = 4164,97 USD
The BTC price with this fix would be : 4164,97 USD
40% lost coins
47769994026 / 9830907 = 4859,16 USD
The BTC price with this fix would be : 4859,16 USD
Possible Conclusions ?!?
BTC is underpriced
The price of a single bitcoin is underpriced, because there are less BTC in circulation than thought :
The price of a single BTC should be between : 4164,97 USD -- 4859,16 USD
Market Capacity is overestimated
The market capacity of BTC is overestimated because it is based on wrong BTC circulating supply and should be lowered by 30 to 40 %
The market capacity should be : 28,661,812,740 USD -- 33,438,995,818 USD
Let me know what you think in the comments !
Cheers,
PS : All those calculations were based on cryptomarketcap.com prices, 11 June 2017.