Bitcoin maximum supply will reach over 21 million coins and now more than 18 million are already mined. As per the Bitcoin news today the actual supply of the coins within the economy has to be bigger due to the many forms of fractional reserves practices.
The cryptocurrency expert Eric Wall warned that there is nothing to hold back the bitcoin owners from effectively expending the supply which could happen similarly as the banks hold onto the portfolio of assets. Wall believes that BTC usage could adopt a broader money supply which is similar to a mix between the activity of the central banks. Currently, most of the bitcoin adopters want to hold their coins in their own wallets. The custodial services however for crypto assets are expanding. Coinbase offers multiple custodial wallets and the Bakkt bitcoin futures exchange also bases the trading on holding BTC for its clients. Wall warns that this is the first stage of using IOUs instead of Bitcoin.
This usage of Bitcoin is compared to promissory banknotes that are issued in exchange for actual gold that is stored in banks. However, the proponents of sound money believe that any form of reserve banking will defeat the original purpose of BTC and will allow anyone to control their own wealth. The exchanges are the best option to actually inflate the Bitcoin maximum supply. The market operators claim to preserve Bitcoin in their cold wallets but they issue a database entry to the traders. By adding margin and lending services, the exchanges manage to increase the impact of BTC and the coins they hold into custody.
The exchanges trade about 1.5 million BTC each day and represent a small part of the supply. OTC deals are harder to estimate and the Bitcoin network carries about $4 billion and $300 million of transactional value per day which is still only a small fraction of the total BTC market cap. The supply of actual BTC coins is diminished. Some of the coins are locked beyond the retrieval because of private key losses and some coins have also been seized by states and law enforcement as we have seen in the previous blockchain news.
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Stefan has been writing articles for DCForecasts since 2016 in-house full time. As one of our main cryptocurrency writers, he focuses on covering the latest cryptocurrency news, technical charts, price analyses of coins and press releases. When he is not exploring and covering the latest topics in crypto, you can find Stefan playing basketball, tennis or cycling.
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