Bitcoin scarcity rises as bad exchanges pull 1.2 million BTC from circulation

Historical crypto crash data revealed that 14 crypto exchanges, together, were responsible for the loss of at least 1,195,000 BTC , or 6.3% of the 19.2 Bitcoin currently in circulation.

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One of the main factors that differentiates Bitcoin (BTC) from fiat money and most cryptocurrencies is the strict limit of 21 million on its total circulating supply. However, the demise of many crypto exchanges over the past decade has permanently removed at least 5.7% (1.2 million BTC) of total issuable Bitcoin from circulation.

The lack of clarity around proof of a crypto exchange's reserves has emerged as the main reason for their sudden meltdowns, as seen recently with FTX. Historical crypto crash data revealed that 14 crypto exchanges together were responsible for the loss of 1,195,000 BTC, which is 6.3% of the 19.2 Bitcoin currently in circulation.

Bitcoin lost due to outdated crypto exchanges . Source: Casa Blog

A survey conducted by Jameson Lopp, co-founder and CTO of Bitcoin storage platform CasaHODL, revealed that Mt. concerns exchanges losing BTC holdings.

While Bitcoin's scarcity is directly tied to its value as an asset, Lopp pointed out that fake Bitcoin offerings are currently threatening the ecosystem, adding that "Bitcoin will not be a great store of value if most people buy fake bitcoin.” Surveys confirm that at least 80 crypto assets have “Bitcoin” in their names, aimed solely at misleading BTC investors.

As a result, investors who buy fake Bitcoin assets have a negative impact on the price appreciation of the original Bitcoin.

Over 80 crypto assets have the word "bitcoin" in their name.14 have a market capitalization greater than $1,000,000.3 claim to be Bitcoin.1 is Bitcoin.< /p> —Jameson Lopp (@lopp)