In brief

  • According to an alternative calculation by Coin Metric, there are 14.5 million BTC in circulation.
  • The researchers have said that many coins are lost and not available any more.
  • If these numbers are correct, Bitcoin’s real market cap is $539.8 billion.

Blockchain analytics firm Coin Metrics has released a new metric, which is supposed to give a more realistic representation of Bitcoin’s circulating supply.

According to the major cryptocurrency aggregators, there are 18.6 million Bitcoin in existence. However, as Coin Metrics points out, many coins are lost and not available to the market anymore.

This led the researchers to create a so-called “free float supply”, something they believe gives “a more realistic representation of the market's Bitcoin supply.” According to the metric, this number is currently standing at 14.5 million BTC.

This means that roughly 3.9 million BTC ($14.5 billion in today’s prices) that are supposed to be in circulation has been wiped out.

The researchers haven’t detailed what their methodology is based on; however, a quick look at the chart suggests they excluded coins that haven’t moved for the past five years. This doesn't necessarily mean that those coins are lost.

Circulating supply is the current amount of a cryptocurrency that has been mined (or created in case of certain other coins) and is technically available to use. Circulating supply is also the key metric used when calculating market capitalization of a coin (Market Cap = Price x Circulating Supply).

The Coin Metrics team has also applied this free float methodology to Bitcoin forks, such as Bitcoin Cash, Bitcoin SV, and Bitcoin Gold, claiming that it “generates an even starker difference in what is most commonly reported as the supply of these assets.”

According to the researchers, this implies that the market cap of both Bitcoin and its forks can be overstated, and this might have implications for the investors using market cap as a benchmark value.

If these estimates are correct, that could mean that Bitcoin’s real market cap is $539.8 billion instead of the asserted $691.3 billion, with even lower values for the forks of the largest cryptocurrency.

“It's a different view for the community to decide on,” said the Coin Metrics team.

This is not the first time Coin Metrics offers alternative approaches to the commonly applied metrics. Last year, the firm’s lead analyst Karim Helmy suggested a new technique to measure miners’ activity.