The impact of Bitcoin "Halving"

[Duke of Marmalade]

That comment by PTJ is not a compelling argument for owning Bitcoin.

My two cents....

In my view the movement away from cash to card payment is the digitization of payments rather than the digitization of money. Even before card payments the amount of physical cash was less than cash deposit on bank ledgers. Though money can essentially be thought of as digital now, and for the retail user there is little benefit (in my mind) to owning a digital Euro issued as CBDC or a regular Euro. However, every major central bank is investigating CBDC's right now.

I have read almost every Central Bank paper and peer-reviewed article on CBDCs published over the last 3 years and the conclusion is "CBDCs have potential but much more research is needed to understand the design, risks and costs". My opinion is the spike in crypto popularity in 2017 drew attention to the regulators, but it was the Libra announcement by Facebook that forced them into action on CBDC. This is because a 160bln market cap cryptocurrency is of little threat but a global company with 2.5bln users is a threat. I don't think Bitcoin is going to result in a disruptive innovation because the incumbents are showing adaptability. The biggest space for innovation in financial markets is payments, that's why Facebook got into Libra and why Stripe is valued at $36bln.

Bitcoin, in my opinion, is a speculative investment, I actually researched how one could acquire a bitcoin in Dublin and then spend it, my findings are the costs were prohibitive and there is nowhere to spend it. Thus it is really a closed economy, the value is set in the network and on exchanges which are less regulated, less sophisticated and easier to manipulate.

Okay, I Googled CBDC. We don't want to stray too far off topic but is my understanding correct that with a CBDC rather than a conventional Euro entry on a bank ledge, the former is backed directly by the Central Bank?
I feel fairly sure that it was the digitization of the payment that PTJ was referring to rather than the backing of the digital entry as I don't see Covid-19 having any particular implications for this latter.

 

[DublinHead54]

Okay, I Googled CBDC. We don't want to stray too far off topic but is my understanding correct that with a CBDC rather than a conventional Euro entry on a bank ledge, the former is backed directly by the Central Bank?
I feel fairly sure that it was the digitization of the payment that PTJ was referring to rather than the backing of the digital entry as I don't see Covid-19 having any particular implications for this latter.

The question is not clear. The jury is out on CBDC for the optimal design and how it is represented on a central banks balance sheet, there is not a definitive answer. In Terms of Covid response, academics are beginning to research the potential of a digital asset as a form of monetary policy to respond to pandemics. The crypto media is suggesting that a digital dollar / euro would have helped fiscal response during Covid based on some comments by key people but nothing more than conjecture.

 

[tecate]

As said before, Fiat Cash was hopelessly handicapped in this contest since by definition inflation is the loss of value of Fiat Cash (meaning M2 - notes and coin and checking accounts, not deposits). So it scored zero in the category of Purchasing Power.

So the characteristics of FIAT is that it's a bad store of value? We all get that - understood. You think this is not a fair comparison but why isn't it? You talk of deposits. I don't think a hedge fund is putting money in the post office. He covers bonds/the yield curve. And as to the suggestion that he shouldn't have compared FIAT, the reason he should is because there's a wall of wealth sitting in USD right now on the sidelines. It has been used in the past as a store of value in these circumstances and it is being used as such today (even though its a bad store of value). For that reason, they were right to assess it. Sorry that you don't like the outcome which was this:
“If something is by design going to depreciate 2% per year through inflation, why own it?”

The sponsor of the contest made a big pitch for Bitcoin:

You mean that the results of the research and analysis of a hedge fund with no connection to the crypto sector led to findings that make a strong case for including bitcoin in an investment portfolio.

Notwithstanding this endorsement Bitcoin came plumb last, even behind the hobbled Fiat Cash. PTJ's observation on this performance was as follows: So despite his enthusiastic promotion of the brilliance of bitcoin he still expected to to come in last.

What 'promotion'? This guy doesn't have anything to do with the crypto sector. He's a respected player within the hedge fund industry.

In the event it got a total thumbs down on Trustworthiness which shows a considerable amount of ignorance on behalf of the Research Group - the White Paper makes a big play about how bitcoin avoids the need for trust in Central Banks.

No it doesn't. It shows a convenient misinterpretation by yourself as to how they defined 'trustworthiness' for the purposes of this analysis:
"Trustworthiness: How it is perceived through time and universally as a store of value."
It's not an assessment on the basis that its peer to peer money that, through its design from the outset, assumes a lack of trust. Its a consideration of how it's perceived over time. Their conclusions:
"No surprise here Bitcoin got the lowest score because it is also the youngest entrant at 11 years of age."
The metric here is time - and it's the youngest asset in the contest in the race by the longest of distances.

The fact that it wasn't as bad a last as PTJ expected has persuaded him to have a punt on bitcoin with no more than 2% of his portfolio - a "great speculation" in his own words.

So its a new asset that is showing great promise in terms of its characteristics as a store of value - but its an unknown as it hasn't been round the block by comparison with the alternatives. Hedge funds tend to be conservative. Bitcoin as a mature asset class would score much higher. But therein lies the speculation. He likens the potential for bitcoins performance to that of gold in the 1970s when it shot up in value in the face of rampant inflation. Should conditions favour a similar scenario (a bout of inflation), there's a hell of a lot more upside potential in bitcoin (a formative store of value) than gold (a mature asset).

And there are those in the bitcoin community who have heralded this as a ringing endorsement by a leading hedge fund manager

What's far more significant is that there are those not in the bitcoin community but in the hedge fund industry who have sat up and taken notice. Furthermore, most within bitcoin circles suggest that every portfolio should have a couple of % of said portfolio in bitcoin. The logic is similar. Whilst bitcoin is formative as a new asset and store of value, the upside potential outweighs the risk and then some. That was the case before consideration of 'the great inflation'. It's got an even stronger case given the current environment.

He then makes a point that bitcoin, being a mere fraction of the market cap of gold can only make up that difference through a price increase. I mean really!?

So everyone accepts that bitcoin is formative in its progression towards digital gold and/or an uncorrelated asset in its own right. It has several advantages over gold such as the following: Its digital, portable, divisible, difficult to counterfeit and easy to authenticate. It's market runs 24/7-365 - making it much more accessible. It's started out from a stand still compared with assets that have been around for donkeys years. If it brings good characteristics to the table in terms of a store of value - with several advantages over other assets - then why shouldn't it take a greater market share? Its market capitalisation right now is less than 2% of that of gold.

He tells us elsewhere that bitcoin has 10 times the market cap of rival cryptos. Surely by the aforesaid "logic" that gives much greater scope for a price surge in bitcoin's over 7,000 crypto lookalikes.

That wayward argument has been outed here a long time ago. Firstly, on the 7,000 cryptos, do you want to exaggerate some more for even more sensational effect? How many of the 2,000 cryptocurrencies pursue a store of value use case? Very few. Of those, what advantage do they have over bitcoin in terms of store of value use case? When we talk of X number of cryptocurrencies, we're talking about X number of projects. They don't go beyond project status if they don't provide unique advantages over bitcoin in a store of value use case (without dropping the ball on some other essential characteristic). In terms of market capitalisation, bitcoin is 67% dominant in the overall marketplace - which includes digital assets that don't pursue a store of value use case.

When it comes to Gold vs. Bitcoin, bitcoin presents with several unique advantages over the monetary metal.

I don't think I have been to an ATM this year. I do carry notes as a sort of emergency or to drop something in an SVP box. I don't know about where PTJ hangs out but here in Ireland digitization of the currency is not coming - it has well and truly arrived.

The process of digitisation is ongoing and evolving. There's plenty of cash in use globally (and in Ireland). In the States, they're still using cheques. Secondly, it's a misunderstanding to think that digitisation stops at visa payments. Sweden is the closest to a cashless society. However, they have a E-Krona project opened to bring about a digital currency. A state isn't going to leave the entire ability of citizens to exchange value in the hands of a couple of multi-nationals.
That's what he talks about in terms of digitisation in the context of money. State mandated digital currencies are coming. Corporate digital currencies are coming (Libra). And his point is this:

"It will make the understanding, utility, and ease of ownership of Bitcoin a much more commonplace option than it is today".

It makes complete sense to me. Baby boomers and Gen X folk have a more difficult time getting to grips with virtual currencies. That's not an issue for millennials and those that follow after them. People are going to get much more comfortable in using them - together with such currencies themselves becoming much easier to use over time.

Why bitcoin over any of the 8,000 other crypto currencies?

8,000 is it? Ok, Pinocchio - if you think that adds credence to your viewpoint, fair play.

Okay, I Googled CBDC. We don't want to stray too far off topic but is my understanding correct that with a CBDC rather than a conventional Euro entry on a bank ledge, the former is backed directly by the Central Bank?
I feel fairly sure that it was the digitization of the payment that PTJ was referring to rather than the backing of the digital entry as I don't see Covid-19 having any particular implications for this latter.

It's not off topic at all - it's entirely relevant to the discussion at hand. Secondly, it's patently clear he was very much including the development of CBDCs (Central Bank Digital Currencies) and Corporate Digital Currencies (Facebook's Libra) in this consideration of the drive towards greater digitisation. He states:

"The probable introduction of Facebook’s Libra (whose value will be pegged to the US dollar and will not be a store of value in that sense) as well as China’s DCEP, also tied to the yuan, will make virtual digital wallets a commonplace tool for the world."

 

[Duke of Marmalade]

“If something is by design going to depreciate 2% per year through inflation, why own it?”

We are talking about the filthy lucre here, possibly Covid ridden as you say. Monetary assets like deposits are a different beast and are a valid asset class, which have performed reasonably well as an inflation hedge over time. Better than bonds I think. Given today's zero interest rate environment that might seem like a pedantic point. But in normal times no law abiding citizen thinks in serious terms of keeping a substantial pile of used bank notes but many cautious folk are happy enough with bank deposits and/or state savings. I don't mind Fiat Cash being in the race as a sort of pacemaker destined to finish last (unless there is a real donkey in the race) but Monetary Assets should not have been left in his stable.

You mean that the results of their research and analysis led to findings that make a strong case for including bitcoin in an investment portfolio.

I am pointing out that the steward of the course made a very strong case for one of the runners and yet it still finished last.

What 'promotion'?

The strong tip given for one of the runners in the race as mentioned above.

No it doesn't. It shows a convenient misinterpretation by yourself as to how they defined 'trustworthiness' for the purposes of this analysis:
"Trustworthiness: How it is perceived through time and universally as a store of value."
It's not an assessment on the basis that its peer to peer money that, through its design from the outset, assumes a lack of trust. Its a consideration of how it's perceived over time. Their conclusions:
"No surprise here Bitcoin got the lowest score because it is also the youngest entrant at 11 years of age."
The metric here is time - and it's the youngest asset in the contest in the race by the longest of distances.

Fair point, my White Paper reference is erroneous.

Its market capitalisation right now is less than 2% of that of gold.

And that of Ripple a much smaller percentage still. I really think that any argument that the market cap comparison with Gold points to the only way to close that gap is to increase the price and is therefore a bull indicator is a non sequitur. But it does give me an inkling as to why that Raoul Pal fella thinks bitcoin has the potential to go to $1m before the next Great Halvening.

That wayward argument has been outed here a long time ago. Firstly, on the 7,000 cryptos, do you want to exaggerate some more for even more sensational effect?

Genuine Simon Harris moment on my part, don't know where I got that figure from. I have corrected earlier posts. All the same a figure of 2,000 hardly nullifies the thrust of my point.

The process of digitisation is ongoing and evolving. There's plenty of cash in use globally (and in Ireland). In the States, they're still using cheques. Secondly, it's a misunderstanding to think that digitisation stops at visa payments. Sweden is the closest to a cashless society. However, they have a E-Krona project opened to bring about a digital currency. A state isn't going to leave the entire ability of citizens to exchange value in the hands of a couple of multi-nationals.
That's what he talks about in terms of digitisation in the context of money. State mandated digital currencies are coming. Corporate digital currencies are coming (Libra). And his point is this:

"It will make the understanding, utility, and ease of ownership of Bitcoin a much more commonplace option than it is today".

It makes complete sense to me. Baby boomers and Gen X folk have a more difficult time getting to grips with virtual currencies. That's not an issue for millennials and those that follow after them. People are going to get much more comfortable in using them - together with such currencies themselves becoming much easier to use over time.

It is an argument but for me even if bitcoin was tethered to something real as these CBDCs purport to be it doesn't bring anything new to the party that I don't currently have with my various cards. PTJ thinks this will be the big game changer for bitcoin. Don't see it myself but that is a matter of opinion. In fact for those who are attuned to the nuance between digital payment and digital cash, Central Bank or Facebook sponsored digital cash could well remove one of their rationales for holding bitcoin.

8,000 is it? Ok, Pinocchio - if you think that adds credence to your viewpoint, fair play.

Fax Machine moment.

 

[tecate]

We are talking about the filthy lucre here, possibly Covid ridden as you say. Monetary assets like deposits are a different beast and are a valid asset class, which have performed reasonably well as an inflation hedge over time. Better than bonds I think. Given today's zero interest rate environment that might seem like a pedantic point. But in normal times no law abiding citizen thinks in serious terms of keeping a substantial pile of used bank notes but many cautious folk are happy enough with bank deposits and/or state savings. I don't mind Fiat Cash being in the race as a sort of pacemaker destined to finish near last but Monetary Assets should not have been left in his stable.

Disagree entirely. They run a $40 billion hedge fund. The letter was to investors - not to Johnny & Mary. There has been a global race into the USD over the last few weeks - whether you think that is a good idea or not. That's FIAT cash that is sitting on the sidelines. In the digital assets arena, USD stablecoins have exceeded $10 billion for the first time - a 79% increase since February.

I am pointing out that the steward of the course made a very strong case for one of the runners and yet it still finished last.

And in that, you're glossing over the parameters set for that comparison which was this => "Bitcoin got the lowest score because it is also the youngest entrant at 11 years of age."

The strong tip given for one of the runners in the race as mentioned above.

You used the word 'promotion' - again with the prejudicial lexicon. The week before Chris Wood - Head of Equity Strategy with Jefferies - a leading global investment bank - produced a similar letter to clients and suggested they buy both gold and bitcoin. On that occasion, you said he was a 'cultist'. Neither Wood or Tudor-Jones are involved in the crypto sector. There's no 'promotion' here - their findings on bitcoin in the context of their respective research and market knowledge is simply that.

Fair point, my White Paper reference is erroneous.

Meaning?

Genuine Simon Harris moment on my part, don't know where I got that figure from. I have corrected earlier posts. All the same a figure of 2,000 hardly nullifies the thrust of my point.

And you're not quite there. Can you now go through the list and tell us how many of those projects are pursuing a 'store of value' and means of exchange use case? Once you've whittled that down, how many projects have anything but a handful of developers working on them?
As I've said many times, I'm open to the notion that bitcoin could be usurped but it will only be usurped by a digital asset that brings more to the table than bitcoin currently does in terms of store of value use case....without dropping the ball on some other facet of what makes a good store of value. Of the 2,000 digital assets, can you tell me which one is likely to take that mantle as it stands today? Most cryptocurrencies/digital assets will die off - leaving a best in class for every category (and there are a myriad of sub-categories when it comes to the various use cases that are implicated).

And that of Ripple a much smaller percentage still.

Betrays a lack of understanding. Ripple is pursuing a different use case - that of a replacement of SWIFT (and a means for more efficient international remittances).

I really think that any argument that the market cap comparison with Gold points to the only way to close that gap is to increase the price is a non sequitur.

As we ushered in a new millenium, gold was around $280/oz. Today it's $1710/oz. Price is a function of supply and demand. Both gold and bitcoin are scarce assets. If greater demand arises for a fixed supply asset, then its totally logical that price would increase.

Genuine Simon Harris moment on my part, don't know where I got that figure from.

Here I would suspect - although not without purpose.

All the same a figure of 2,000 hardly nullifies the thrust of my point.

Given that few of those projects have anything to do with bitcoin and pursue a different use case, your point is nullified.

It is an argument but for me even if bitcoin was tethered to something real as these CBDCs purport to be it doesn't bring anything new to the party that I don't currently have with my various cards.

It brings plenty to the party but you defiantly won't acknowledge those merits of the digital currency.

In fact for those who are attuned to the nuance between digital payment and digital cash, Central Bank or Facebook sponsored digital cash could well remove one of their rationales for holding bitcoin.

Bring it on! There are regulatory battles to be fought but on the whole, bitcoin will continue to find its place in the world. Usability is the one thing that I want to see improve with bitcoin. Other than that, CBDCs, Libra, etc - will only help find it new users.

 

[tecate]

Or they could just send a one for all voucher.....Hardly a reason to embrace digital currency......

And yet that's exactly what the yanks were proposing. Pelosi put forward a Covid relief bill in March - to include provision for a 'digital dollar' in order to make stimulus payments to citizens. It was later pulled from the bill. It's not the sort of thing that can be rushed and the US are behind China in their development of a CBDC.
If you distribute through banks - or with vouchers, you're implicating a third party. The government want to be able to act fast and distribute quickly in these circumstances. Furthermore, they are beginning to learn (following the last financial crisis) that they don't want banks to be systemic - and be in a position to cut them off if they need to when they get themselves mired in debt.
As per Dublinbay12's point in his post yesterday, they can also dictate how that money is spent and how long you have to spend it via their own digital currency.

That comment by PTJ is not a compelling argument for owning Bitcoin.

I disagree - I believe its relevant to its further use and development. It's quite difficult for ordinary people to get their heads around the use of a digital or virtual currency. Further digitisation - evident in every day life and where means of exchange is concerned - will break down that barrier.

In my view the movement away from cash to card payment is the digitization of payments rather than the digitization of money. Even before card payments the amount of physical cash was less than cash deposit on bank ledgers. Though money can essentially be thought of as digital now, and for the retail user there is little benefit (in my mind) to owning a digital Euro issued as CBDC or a regular Euro. However, every major central bank is investigating CBDC's right now.

Agree on the digitisation of payments rather than digitisation of money. However, when a society is on the brink of being cashless, they're not going to leave the ability of citizens to pay in the hands of a couple of multinationals. Secondly, there's all sorts of control that can be brought about from the government/CB side with their own digital currency as you alluded to yourself yesterday. And you're quite right...all major CBs are investigating their own digital currencies with the Chinese being the furthest along. I don't think you will see CBDCs in the hands of ordinary people for some time. However, I do think you will see them used at higher levels much sooner.
Many countries are also trying to get out from under the USD as reserve currency - so it has a part to play here too - for Russia/China/Iran - and many others. Iran was locked out of the international banking system - with digital currency, it will be much harder for that to happen....or rather for that to matter.

I don't think Bitcoin is going to result in a disruptive innovation because the incumbents are showing adaptability. The biggest space for innovation in financial markets is payments, that's why Facebook got into Libra and why Stripe is valued at $36bln.

It's not a binary deal. Bitcoin can play its own unique part. Libra and CBDCs can come along - but they're not decentralised crypto.

Bitcoin, in my opinion, is a speculative investment,

It is - in the same way as PTJ laid out. i.e. it's 11 years old which is nothing in the development of a financial asset - and its formative in its development as a store of value. That's where the speculation lies. When it matures, it will be as boring as gold (but still with its merits all the while). It may be able to make greater inroads as a means of exchange at a later stage - but store of value comes first.

I actually researched how one could acquire a bitcoin in Dublin and then spend it, my findings are the costs were prohibitive and there is nowhere to spend it,

You can acquire bitcoin via an exchange such as Binance for an exchange commission of 0.1%.
I've been tracking the progress of bitcoin since 2013 - and have had cause to use it in various circumstances. Costs and difficulty in acquiring it have changed considerably over that timeframe. The eco-system continues to be built out - both for retail access and institutional (which for the most part has yet to come).
As regards spending it, you're talking about a means of exchange use case and mass market usage. Considerable work is required on usability/UI and technical issues like transaction cost and transaction time before that comes into play. Even then, volatility will need to have calmed down quite a bit. As it develops and broadens in terms of market cap as a store of value/digital gold, that volatility will dissipate. Layer 2 solutions like lightning network will continue to develop. Email was available many years before the mass market came to use it (as it had to be made easier to use and palatable for mass market usage).

Thus it is really a closed economy, the value is set in the network and on exchanges which are less regulated, less sophisticated and easier to manipulate.

Same answer on regulation/market sophistication/manipulation. Manipulation is facilitated by a small market. It becomes ever more difficult as that market expands. Regulation continues to be developed - but regulation always trails innovation.

The crypto media is suggesting that a digital dollar / euro would have helped fiscal response during Covid based on some comments by key people but nothing more than conjecture.

Conjecture perhaps but the decentralised crypto sector is not going to be positively predisposed towards centralised digital currencies..so no motivation to recognise such advantages for them other than if they are actual advantages. Pelosi presenting an emergency bill to include a digital dollar would suggest that its not just the crypto media that recognises what advantages such a development could bring for a government.

 

[Duke of Marmalade]

Disagree entirely. They run a $40 billion hedge fund. The letter was to investors - not to Johnny & Mary. There has been a global race into the USD over the last few weeks - whether you think that is a good idea or not. That's FIAT cash that is sitting on the sidelines. In the digital assets arena, USD stablecoins have exceeded $10 billion for the first time - a 79% increase since February.

And in that, you're glossing over the parameters set for that comparison which was this => "Bitcoin got the lowest score because it is also the youngest entrant at 11 years of age."


You used the word 'promotion' - again with the prejudicial lexicon. The week before Chris Wood - Head of Equity Strategy with Jefferies - a leading global investment bank - produced a similar letter to clients and suggested they buy both gold and bitcoin. On that occasion, you said he was a 'cultist'. Neither Wood or Tudor-Jones are involved in the crypto sector. There's no 'promotion' here - their findings on bitcoin in the context of their respective research and market knowledge is simply that.


Meaning?


And you're not quite there. Can you now go through the list and tell us how many of those projects are pursuing a 'store of value' and means of exchange use case? Once you've whittled that down, how many projects have anything but a handful of developers working on them?
As I've said many times, I'm open to the notion that bitcoin could be usurped but it will only be usurped by a digital asset that brings more to the table than bitcoin currently does in terms of store of value use case....without dropping the ball on some other facet of what makes a good store of value. Of the 2,000 digital assets, can you tell me which one is likely to take that mantle as it stands today? Most cryptocurrencies/digital assets will die off - leaving a best in class for every category (and there are a myriad of sub-categories when it comes to the various use cases that are implicated).


Betrays a lack of understanding. Ripple is pursuing a different use case - that of a replacement or SWIFT (and a means for more efficient international remittances).

As we ushered in a new millenium, gold was around $280/oz. Today it's $1710/oz. Price is a function of supply and demand. Both gold and bitcoin are scarce assets. If greater demand arises for a fixed supply asset, then its totally logical that price would increase.


Here I would suspect - although not without purpose.

Given that few of those projects have anything to do with bitcoin and pursue a different use case, your point is nullified.


It brings plenty to the party but you defiantly won't acknowledge those merits of the digital currency.


Bring it on! There are regulatory battles to be fought but on the whole, bitcoin will continue to find its place in the world. Usability is the one thing that I want to see improve with bitcoin. Other than that, CBDCs, Libra, etc - will only help find it new users.

tecate I have lots of ripostes for that, in particular that you seem to misinterpret my application of the horse race metaphor. But I notice that this has become a bit of a dialogue, with neither of us even getting any likes/unlikes. So I hope you will agree that until there is a more widespread participation we should let it go at that.

 

[tecate]

tecate I have lots of ripostes for that, in particular that you seem to misinterpret my application of the horse race metaphor. But I notice that this has become a bit of a dialogue, with neither of us even getting any likes/unlikes. So I hope you will agree that until there is a more widespread participation we should let it go at that.

Dukey, if you're saying you'd like to park it up at that, I have no problem with that. I don't get my rocks off on 'likes' so that's neither here nor there. It's a discussion - and if anyone wants to weigh it up, or weigh in, they can do that. If it's not of interest, nobody has to read it.

 

[Duke of Marmalade]

Dukey, if you're saying you'd like to park it up at that, I have no problem with that. I don't get my rocks off on 'likes' so that's neither here nor there. It's a discussion - and if anyone wants to weigh it up, or weigh in, they can do that. If it's not of interest, nobody has to read it.

Enjoyed the discussion but disappointed that it became a dialogue.

 

[tecate]

To my point earlier in this thread, there are now less bitcoin in circulation. Since the Bitcoin Halving on May 11, (GBTC) has purchased 18,910 bitcoin. In that time, only 12,337 BTC newly minted bitcoin have been mined/released. Supply/Demand dynamic at play.

Link

 

[Leo]

To my point earlier in this thread, there are now less bitcoin in circulation.

With people continuing to lose access to their keys, some even by choice , I wonder how the rate of loss compares to that of generation.

 

[tecate]

With people continuing to lose access to their keys, some even by choice , I wonder how the rate of loss compares to that of generation.

Don't have the opportunity to double check it right now but my understanding is that estimates are in the region of 4 million. It makes sense that people were careless in the first couple of years with Bitcoin when it would have had a unit price of a few pennies. Not so much today.

There are some excellent means of multi-sig storage now - from Casa and Unchained Capital. They're just not mass market yet. People are better educated on storage but for those that are careless, mass market multi-sig solutions will be developed. There's also a wallet offering that depends on bio-metrics rather than the user needing to store their private key.

Therefore, in more recent years its reasonable to assume that there has been a reduction in loss of keys and such loss is likely to reduce further as we go forward. Where there has been loss, it just makes a scarce asset scarcer still.