New research forecasts that up to $545 million of Bitcoin will be lost in 2022, with the majority of the funds expected to be irretrievably lost.
This is according to e-wallet recovery firm Crypto Asset Recovery, which explores how much Bitcoin is lost day to day, and provides an estimate of the amount of Bitcoin likely to be lost in 2022.
It explores the common ways people lose Bitcoin, such as forgetting passwords to crypto wallets and making a mistake in recording their seed phrases.
Crypto Asset Recovery says more than 1 000 people a week contact the company, looking for help recovering crypto funds.
These are funds lost through a host of reasons, including people forgetting the passwords to their wallets, people dying without giving adequate instructions for how to access their funds, and people unintentionally sending crypto to a burn address, or to an address on a different network.
The research does not include Bitcoin lost to scams or theft due to the fact that, while such funds are lost to the original wallet-holder, they are not lost to Bitcoin’s total money supply system.
Those funds will likely continue to circulate. As such, they are excluded from this research.
“While no one knows the exact amount of Bitcoin to be lost, an estimate of between 2% to 4% of the 328 500 BTC mined in 2022 is likely to get lost. As of 20 April 2022, Bitcoin’s price is approximately $41 500 – this means that between $272 million and $545 million in Bitcoin alone is likely to be removed from the Bitcoin money supply in 2022,” says Crypto Asset Recovery.
According to the research, a new Bitcoin block reward is issued every 10 minutes, and in 2022, the block reward is 6.25 Bitcoin. A block reward refers to the number of Bitcoins you get if you successfully mine a block of the currency.
Since there are 525 600 minutes in a year, and a block reward is issued every 10 minutes, 52 560 block rewards, or 328 500 BTC, will be issued in 2022, it says.
Chainalysis, a digital forensics firm specialising in crypto-currency, forecasts that when all 21 million bitcoins are mined by the year 2040, the actual amount available to trade or spend will be 20% lower, due to lost Bitcoin.
The firm notes that by 2017, between 2.78 million and 3.79 million Bitcoins were already lost for good to their owners.
Meanwhile, 2020 Cane Island Digital research estimates that about 4% of the available supply of Bitcoin is lost each year. Beginning May 2020, the number of Bitcoins lost in a month has exceed the number of new Bitcoins, it says.
In terms of stolen crypto-currency, new research published by TradingPedia shows that record amounts of crypto were stolen from DeFi platforms in Q1 2022 – there have been $1.26 billion stolen from decentralised finance (DEFI) platforms in the first quarter. This constitutes about 55% of all DEFI crypto thefts for the entire 2021, says TradingPedia.
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