Bitcoin's total circulating supply has just exceeded 95% of its 21 million hard supply cap – an enormous milestone reached nearly 17 years ago when inventor Satoshi Nakamoto mined the Genesis block on January 3, 2009.
Since there are currently 19.95 million Bitcoin in circulation, only 2.05 million Bitcoin remain to be mined. The query is: what does this mean for the long run of Bitcoin and its price?
Speaking to Cointelegraph, Thomas Perfumo, a worldwide economist at crypto exchange Kraken, said that is a very important milestone within the Bitcoin narrative as annual supply inflation is currently about 0.8% per yr and hard money “requires a reputable narrative for people to confidently adopt a currency as a store of value.”
Bitcoin’s annualized inflation rate is anticipated to say no as supply declines. Source: Bitcoin Visuals “Bitcoin uniquely combines its functionality as a worldwide, permissionless, real-time settlement protocol with the peace of mind of authenticity and scarcity that one would expect from a masterpiece just like the Mona Lisa.”
“This milestone is a reminder of Bitcoin’s resistance to devaluation and intervention, which is working as intended almost 17 years later,” Perfumo added.
A 95% issued Bitcoin supply is not going to only drive up prices
It has been speculated that by limiting the access of latest supply, the worth of every coin should increase as demand increases while supply is throttled.
However, Jake Kennis, senior research analyst at on-chain analytics platform Nansen, said the milestone was unlikely to maneuver the market immediately. However, it confirms Bitcoin's digital gold narrative and illustrates how core holders and institutional players are locking up the limited supply for long-term ownership.
“It highlights Bitcoin's scarcity, however the remaining 5% will take well over 100 years to achieve 100% in circulation as a consequence of halving events. While increasing scarcity can provide psychological support for prices, this particular milestone is more of a narrative event than a direct price catalyst,” Kennis said.
“The real story is just not the 95 percent number itself, but that Bitcoin’s supply schedule is working exactly as planned, predictable and scarce in a time of unlimited fiat money printing,” he added.
Based on the block detection rate and the halving process, which occurs roughly every 4 years or every 210,000 transaction blocks, it’s predicted that the last Bitcoin can be mined across the yr 2140.
The offering milestone is an indication of Bitcoin’s maturity
Marcin Kazmierczak, co-founder of blockchain oracle RedStone, also believes that the 95 percent milestone is unlikely to be a direct price catalyst as Bitcoin's supply dynamics are already known, tokens have been issued over the past decade, and markets have regularly absorbed them.
However, he said the milestone underscores why scarcity is very important to Bitcoin's long-term value and traders should focus more on whether the infrastructure that supports it’s scalable to support the following phase of institutional integration.
“What is more necessary is the macroeconomic context, adoption trends and regulatory clarity than reaching an arbitrary percentage threshold,” Kazmierczak said.
“The real turning points was once in the provision curve. This represents the maturity of Bitcoin – we’re moving from an asset in the expansion phase to an asset with fixed, predictable long-term scarcity. This is useful for institutional adoption, however it is just not a market-moving event in itself.”
Miners could soon be forced to alter
A price surge will not be imminent, but Kennis said the dwindling supply will likely increase pressure on miners already feeling the pain of the April 2024 halving, which reduced the reward for every block to three,125 Bitcoin.
“Miners are already feeling the impact of reduced block rewards through halvings, most recently in 2024, forcing them to increasingly depend on transaction fees for his or her profitability,” he said.
“The 95% milestone highlights this long-term transition, potentially displacing less efficient miners at a time when the network hash rate typically recovers quickly.”
Kazmierczak took the same view, stating that the economics of mining will fundamentally change as supply growth slows dramatically.
“We are transforming from block reward-dependent miners to transaction fee-dependent miners. This creates pressure on miners to consolidate or seek efficiencies,” he said.
