Bitcoin Mining Nears Completion: What Happens When All Coins Are Mined?

More than 94% of all coins, or 19.742 million BTC, have been mined on the network of the biggest cryptocurrency. This suggests that the amount of coins left for Bitcoin miners to produce is only 6%. In this post, we'll look at the quantity of coins that are currently for sale on the open market and the factors that influence investors' perception of Bitcoin as a long-term investment.

Bitcoin's Supply Limits

The maximum amount of Bitcoin that may be issued at a program level is 21 million BTC. The blockchain enables the online recording of all coin transactions as it functions as a digital register for all cryptocurrency transactions, even those involving recently mined Bitcoins.

With a tiny temporal variance, the issuance process for Bitcoin is predictable, making it easy to anticipate in advance how much and when BTC will be issued. It is anticipated, for instance, that in November 2025, the number of coins mined will reach 95%, and in December 2034, it will reach 99%.

In December 2021, the 90% coin milestone was reached for Bitcoin. As a result, the pace of new Bitcoin generation is progressively declining. This procedure, known as halving, is incorporated into the algorithms of the original coin.

Halving and Mining

A halving is the intentional, planned decrease in the reward that miners receive when they upload a new block of transactions to the network. The halving of Bitcoin occurs approximately every four years, or more precisely, when miners have completed 210,000 new blocks. With each halving, the amount of Bitcoins that miners receive as payment for each block is halved.

In 2009, when Bitcoin was first released, each block awarded to miners was worth 50 Bitcoins. This prize was, however, reduced to 25 Bitcoins following the initial halving in 2012, and subsequently to 12.5 Bitcoins in 2016, 6.25 Bitcoins in 2020, and 3.125 coins in 2024. In 2028, the next halving is expected.

Long-Term Holding Strategy (Hodl)

Apart from its restricted issuance, the Hodl meaning is adhered to by several investors and other market players. It describes a long-term passive investment approach where investors, despite brief price swings, keep a comparatively steady portfolio over time.

For instance, even though the asset has dropped 21% from its all-time high price in March 2024, over 75% of all coins stayed constant for the most of 2024.

Market Implications of Limited Bitcoin Supply

Since 75% of BTC have been inactive for longer than six months, it's possible that long-term investors are utilizing the primary cryptocurrency more frequently for savings in anticipation of potential price increases.

BlackRock observed that this idea was valid. The company's Head of Digital Assets, Robert Mitchnick, stated at the Bitcoin 2024 conference that investors in Bitcoin-ETF shares often have a buy-and-hold approach.

The overall quantity of Bitcoins available for trade will decrease if the inclination to hoard coins persists, which might raise the price as demand rises and supply falls.

Risks of Panic Selling

If investors give in to fear, this conduct increases the dangers and might push the price of the leading cryptocurrency. Not all investors are in the green, despite the fact that 75% of coins have not changed in more than six months. Additionally, some investors' opinions can shift.

The pattern is comparable to 2018, 2019, and mid-2021, according to some analysts, indicating that many investors run the danger of caving in to fear and starting a bear market.

Conclusion

The pace at which new Bitcoins are created has been progressively decreased by the regulated issuance through halving, making the surviving coins more and more rare. Prices may rise as a result of this scarcity and long-term investors' strong "Hodl" mentality when demand exceeds supply. Market volatility is still a serious danger, though, as panic selling during downturns may cause abrupt declines. In the end, the limited supply of Bitcoin and its growing popularity as a long-term asset indicate that its market dynamics will likely change over the next several years, posing both possibilities and difficulties for investors.

SimpleSwap reminds you that this article is provided for informational purposes only and does not provide investment advice. All purchases and cryptocurrency investments are your own responsibility.