Lost and HODLed’ Bitcoin (BTC) hits 34% of supply, what does this mean?

Lost and HODLed’ Bitcoin (BTC) hits 34% of supply, what does this mean?

While lost Bitcoin drives scarcity, on-chain metrics cannot determine the extent to which users benefit.
Data from the on-chain market analysts Glassnodeshows the number of hodled or lost Bitcoin tokens has hit a seven-month high of 7,167,889.595 BTC. This represents 34% of the total supply.
This metric is derived by looking at the movement of large and old stashes. But it has limitations in that it cannot distinguish between coins in storage and coins that cannot be accessed.
Lost Bitcoin refers to the permanent loss of access to a wallet storing the tokens. Given that the ledger is immutable, and there is no third party to call on for help in these circumstances, the BTC is lost forever.
Although recovery services do exist, the jury is out on whether lost Bitcoin can be recovered. There’s also the issue of scammers posing as recovery firms.
Nonetheless, millions of dollars of Bitcoin, and other cryptocurrencies, continue to get lost each year. Cane Island Digital Research estimates that users lose as much as 4% of the available supply every year.
Data analysts, Chainalysis, dig deeper with their June 2020 research on ownership and trading. As of last year, their report reveals that 3.7 million tokens were lost, representing 20% of the available supply.
Lost Bitcoin will reduce the token’s total supply. In theory, by making BTC even scarcer, this will act as a driver of price appreciation.
As such, an increasing number of hodled or lost Bitcoin tokens is good for existing hodlers. But because there are no splitting hodled coins and lost coins, the degree to which it’s good is a matter of debate.