How Many Bitcoins Are There? Bitcoin Supply Explained

Key Takeaways

• Bitcoin boasts a fixed supply of 21 million coins, designed to create scarcity and protect its value. Regular halving events steadily reduce new coin issuance, transforming Bitcoin into a deflationary asset.
• Approximately 19.73 million Bitcoins circulate today, with roughly 1.5 million remaining for mining. Halving events decrease Bitcoin mining rewards, and experts predict the final Bitcoin will emerge in 2140.
• Lost private keys, hardware failures, and other errors permanently destroy Bitcoins. Losing Bitcoins decreases its supply, making it scarcer and potentially increasing its price.
• Exchanges hold approximately 2.73 million Bitcoins, impacting market liquidity. Bitcoin movements on and off exchanges influence market prices and reveal market sentiment.

Many people view cryptocurrency as an investment opportunity or, at the very least, a hedge against inflation. Security’s 2024 cryptocurrency report reveals that about 40% of American adults are cryptocurrency owners, and 63% look forward to increasing their holdings in the upcoming year.

With profitable returns like those seen with Bitcoin, cryptocurrency becomes a lucrative investment option for many. Investing in crypto requires tact, patience, and resilience. You can make informed investment choices if you understand the fundamentals, such as supply. 

This article explores Bitcoin’s supply dynamics, highlighting its current circulation, supply limit, mining, and lost Bitcoin.

How Many Bitcoins Are There?

There will only ever be 21 million Bitcoins. Satoshi Nakamoto added this limit to Bitcoin’s source code, and network nodes enforce it. This fixed supply contrasts traditional fiat currencies, which central banks can print at will. The only way to add new Bitcoins is through a specialized process called mining. More on it below.

To mimic the scarcity of precious metals like gold, the rate of new Bitcoin generation gradually decreases. The Bitcoin halving process, occurring roughly every four years, ensures a steady decline in Bitcoin issuance. While the exact reasoning behind the 21 million cap remains a mystery, its impact is undeniable. By imposing a finite supply, Bitcoin introduces a unique economic dynamic that has captured the world’s attention.

How Many Bitcoins Are in Circulation?

At the time of writing, approximately 19.73 million Bitcoins were in circulation. The Bitcoin halving occurs every four years, cutting the mining rewards in half. It controls how much new Bitcoin enters the market. The last halving took place in April 2024.

Bitcoin’s deflationary mechanism sets a clear timeline for its total supply, with miners expecting to produce the final Bitcoin around 2140.

Want to see the exact number right now? Platforms like CoinMarketCap offer real-time data on the Bitcoin supply, giving you a clear snapshot of this finite asset.

How Are New Bitcoins Created?

Bitcoin’s creation is a decentralized process. Nodes across a peer-to-peer network generate new coins. This process, outlined in the Bitcoin generation algorithm, is meticulously controlled. Any attempt to circumvent these rules results in worthless, rejected coins.

Bitcoin miners are users with specialized computers who race to solve complex mathematical puzzles. Miners receive block rewards for their efforts. The first to find the correct solution adds a new block in the Bitcoin blockchain and receives a predetermined Bitcoin amount and any transaction fees included in the block. 

Block rewards incentivize miners to contribute their computing power to secure the network. Without the mining incentive, the Bitcoin network would crumble. 

How Many BTC Are Left To Be Mined?

Approximately 1.5 million Bitcoins remain. While this might seem substantial, the rate of new Bitcoin creation steadily decreases. Every ten minutes, miners add a new block to the Bitcoin blockchain, releasing 3.125 Bitcoins into circulation with each. However, this rate is not constant. The Bitcoin halving, which has already reduced the block reward from 50 BTC to 3.125 BTC, will gradually extend the time needed to mine the remaining Bitcoins, with mining expected to conclude around 2140.

What Happens When All Bitcoin Has Been Mined?

The Bitcoin network will cease producing new bitcoins. While the block subsidy vanishes, miners will continue collecting transaction fees. Miner income and Bitcoin security will depend solely on these fees.

Why Are There Only 21 Million Bitcoins?

When you discover the total supply of bitcoins will always be 21 million, you may question the rationale behind this specific number chosen by the creators. What’s the significance of this cap?

Think of it this way: if you knew that no more than a certain number of rare objects would ever exist, wouldn’t that object become more valuable over time? The same principle applies to Bitcoin. The 21 million limit creates an intentional scarcity to protect Bitcoin’s value as it becomes harder to obtain.

As the world increasingly turns to digital currencies, Bitcoin’s limited supply becomes a hedge against inflation. With fewer bitcoins available, the value of each could rise as demand grows. So, the next time you hear about Bitcoin’s 21 million cap, remember—it’s not just a random number. It’s a vital part of what makes Bitcoin valuable.

How Many Bitcoins Have Been Lost?

Imagine having Bitcoin worth thousands of dollars but realizing you can’t access it. Unfortunately, this is a reality for several Bitcoin holders. A significant portion of Bitcoin is lost forever, contributing to its deflationary nature.

According to a Chainalysis report, approximately 20% of all Bitcoins have stayed in their current addresses for over five years, suggesting they’re lost. But what does “lost” mean?

• Lost Private Keys: The most common way Bitcoin is lost is through forgotten or misplaced private keys. The keys are the only way to access Bitcoin in the corresponding wallet.
• Hardware Failure: If a Bitcoin owner stores their crypto in a damaged hardware wallet without backing up the private keys, those coins are gone forever.
• Human Error: Sending Bitcoin to the wrong wallet address without a way to reverse the transaction is another way Bitcoin can be permanently lost.
• Deceased Owners: In select cases, individuals have passed away without sharing their private keys or wallet information, making their Bitcoin inaccessible.

These losses highlight Bitcoin’s deflationary status, as each lost coin reduces the total supply, potentially increasing the value of those that remain accessible.

How Many Bitcoins Are on Exchanges?

Crypto exchanges hold approximately 2.73 million Bitcoins. CryptoQuant offers a live balance view for those keen to stay updated, letting you track these reserves in real time.

But why does this number matter? The availability of Bitcoin on exchanges directly affects market liquidity. When more Bitcoin is available on exchanges, it typically means higher liquidity, which can stabilize or lower prices. Conversely, when large amounts of Bitcoin move from exchanges, it may signal an intention to hold for the long term, which can drive prices. These movements offer a glimpse into market sentiment, providing hints about where the market might be heading.

Closing Thoughts

As with all investments, you must understand the basics, like supply and demand. With Bitcoin, the limited supply ensures any increase in demand improves its value. Therefore, Bitcoin’s token dynamic lays a lucrative foundation for investing in cryptocurrency. However, always remember to do your own research before purchasing any cryptocurrency.

This article provides general information only and does not constitute financial advice. Consider your specific situation before making investment decisions. Seek professional guidance. Past performance does not predict future results. We disclaim liability for any losses arising from this information.

FAQs

Why did Satoshi choose 21 million?

Satoshi’s decision was likely influenced by the desire to create a digital asset with a controlled scarcity, mimicking the limited supply of gold. Satoshi made Bitcoin deflationary by capping its supply, increasing its rarity and potential value. Bitcoin’s scarcity drives its demand and value in the market.

What is the Bitcoin halving?

The Bitcoin halving is a scheduled event in the protocol that reduces the mining reward by half every 210,000 blocks, happening every four years. The halving reduces the issuance rate for new Bitcoin and creates scarcity.

When will the last Bitcoin be mined?

Miners will extract the final Bitcoin around 2140. By then, repeated halvings will reduce block rewards closer to zero, capping Bitcoin’s total supply at 21 million. After this, miners will sustain the network through transaction fees, transforming Bitcoin into a purely deflationary currency.