Wow, already 90% of Bitcoins are mined in just 13 years of Bitcoin’s inception
90% of Bitcoins are already mined and in circulation!!
This was a “oh my God” news for me, when I read that 90% of Bitcoins of the total finite supply of 21 million Bitcoins are already mined and in circulation. This means that only 10% of new Bitcoins remain to be mined and brought into circulation.
Definitely with Bitcoin’s finite supply and prospect of increasing demand this is quite a bullish news. This may be hard to believe considering Bitcoin’s recent bearish price action.
So, Bitcoin is on the way to becoming a scarcer and scarcer asset.
Bitcoin Hash rate and Bitcoin mining Difficulty at an All Time High
Other than this, the total hash rate of Bitcoin is also at an all time high. This refers to the amount of computing power with a large amount of Bitcoin miners securing the Bitcoin Network.
The Network difficulty is also on an All Time High, meaning more miners are investing on more costly mining equipment to mine Bitcoin.
Bitcoin’s Difficulty is also on an All TIme High. Data Source
To mine Bitcoin, that is to add new blocks in the Blockchain and verify Bitcoin transactions, miners have to solve complex mathematical problems and with the mining difficulty increasing, powerful bitcoin mining machines are required to solve these problems. Miners with more advanced mining equipment can mine Bitcoins faster than others which is an advantage.
Due to the cost of Bitcoin operations being high these days, there are only large mining farms that find it sustainable, being in the Bitcoin mining business.
However, the fundamentals of Bitcoin are sound with both the Bitcoin hash rate and Bitcoin mining difficulty being at an All Time High.
Remaining 2 million Bitcoins is expected to be completely mined only by 2140
Now, there are only about 2.1 million more virgin bitcoins that can enter circulation. However, these Bitcoins can’t be mined and brought into circulation that soon, with all remaining Bitcoins expected to be completely mined only by 2140.
This is because the issue rate of Bitcoin keeps decreasing with the process of Halving reducing Bitcoin rewards for Bitcoin miners by half, roughly every 4 years after every 210,000 blocks in the Bitcoin Blockchain are mined.
Right now, for mining every Block of Bitcoin, miners get 6.25 BTC as rewards, in the next Halving event somewhere in May 2024, mining rewards will be slashed by half with Bitcoin miners receiving 3.125 BTC for every BTC Block they mine. With less Bitcoin rewards, Bitcoin miners who don’t find Bitcoin mining operations sustainable will close shop.
Bitcoin’s tokenomics is designed to make this asset deflationary in nature
Eventually, as the supply of Bitcoin decreases while its adoption increases, Bitcoin’s price appreciates. Bitcoin’s anonymous creator, Satoshi Nakamoto has designed Bitcoin’s tokenomics ensuring that Bitcoin remains a deflationary asset class, unlike fiat whose value erodes over time as its an inflationary instrument.
Brief peek at Bitcoin’s price action
Now, let’s check the price action of BTC.
Chart from Tradingview
Bitcoin has had its fall from its Nov 8th ATH price of 68,000$ and has for now found support at the 45,000$ range. Only if it breaks the resistance of 53,084$ and finds support at the range can one confirm that Bitcoin will have an uptrend price phase again.Till then we can assume that BTC is in an accumulation phase.
Bitcoin has a lot of institutional money, so its possible whales may manipulate the price, bring BTC’s price to its old strong support level that is - 30,000$, to shake out weak hands. However in the long term, BTC remains inside a bull cycle phase.
A Look at Bitcoin and Alt Coin Dominance
Meanwhile BTC.D that is Bitcoin Dominance is at an All Time Low of 40% and is for now holding support at that range.
Bitcoin Dominance chart from Tradingview
Alt Coin Dominance is at 59% range, not breaking the resistance range of 60%. It appears, investors have taken their money from Bitcoin and put it on Alt coins that Alt coin dominance has increased trying to break it’s All time High range of 64%.
Alt Coin Dominance chart from Tradingview
If Alt coin dominance breaks 64% and forms support at that level, a new Alt Coin cycle may be in store. According to DataDash channel host, Nicholas Mertin, it’s only a matter of time for Alt Coins to gain further dominance.
This is because Alt Coin dominance will increase to Bitcoin because of adoption of these smart contract platforms for real world purposes - DEFI, gaming, blogging, NFTs etc, as Bitcoin does not have many use cases other than being a great store of value.
He further says Bitcoin Dominance can fall further to 36%, with investors taking their funds off Bitcoin and investing into popular Alt coins - Matic, ETH, BNB and then into further small cap Alt coins. In this scenario, BTC price could fall till 30,000$ and find support there.
Cool!!
Conclusion
Personally, since 90% Bitcoins are mined and BTC is getting scarcer, and institutions are buying BTC to hedge against inflation, I don’t want to sell my BTCs right now, if I do it will be for selling BTC at a high to buy back the dips.
Thanks for reading
Disclaimer -: This is not investment advice, just an article from a crypto enthusiast, who is no expert in this field as yet.