In addition to the U.S. election, Bitcoin has another little-known bull market catalyst!
The driving factors behind the bull market of Bitcoin not only include the US election and economic issues, but also involve the identity of Satoshi Nakamoto and potential token losses. A recent HBO documentary has sparked discussions on Satoshi Nakamoto's identity. If it is confirmed that he is deceased, it may reduce market fears about his holding of 1 million bitcoins, thereby positively impacting the price of Bitcoin. Analysts point out that lost bitcoins are equivalent to being "burned," which will further reduce market supply and may lead to price increases
Over the years, the continuously expanding trade deficit, the accumulation of $35 trillion in debt, and the continuous decline in the purchasing power of the US dollar have always been seen as key pillars of the Bitcoin bull market.
Even the possibility of Republican candidate Trump winning the election in November is seen as a recent driving force for cryptocurrencies. Currently, the world's largest cryptocurrency is just a few percentage points away from its all-time high.
However, there is a situation of a structural bull market that has not received much attention, and it may have a significant impact on the long-term price of Bitcoin: the loss of tokens due to holder trends or simply poor planning.
This debate has recently emerged as an HBO documentary released this month may reveal the identity of Bitcoin's founder, Satoshi Nakamoto. Before the premiere of the documentary, some speculated that the true identity of Nakamoto was the late American computer programmer Len Sassaman, who passed away in 2011.
Nakamoto's death may alleviate the long-standing fear that has loomed over the Bitcoin market for years, that this person may sell the estimated 1 million Bitcoins they are believed to hold.
This accounts for a significant proportion of the existing 21 million Bitcoins. For a long time, people have been concerned that such a massive sale could have a negative impact on Bitcoin.
If Nakamoto did not leave proper instructions to transfer the assets after his death, the fixed supply of Bitcoin may be closer to 20 million.
Sean Farrell, head of digital asset strategy at Fundstrat, emphasized this dynamic in a report earlier this month.
"If they determine that Nakamoto is deceased, Bitcoin has a slight upward risk because this effectively means that this portion of supply is completely 'burned'," Farrell said.
"The actual circulation of Bitcoin is undoubtedly less than 21 million," Farrell told Business Insider. "We all know this is true, but it is almost impossible to verify."
This is also because even if holders are still alive, losing Bitcoin is relatively easy.
Lost Bitcoins are essentially "burned," reducing the amount investors can purchase and reinforcing a fundamental economic principle: a decrease in supply in a situation of constant or increasing demand means higher prices.
Farrell estimates that about 1.5 million Bitcoins (approximately 7.5% of the total supply) may be considered "potentially lost" because they have not moved since the first Bitcoin exchange was established in 2010, roughly a year after Bitcoin's inception.
A 2021 article in The New Yorker introduced a man from Wales who accidentally threw away a hard drive containing Bitcoins, losing a batch worth about $500 million at the time.
"It may only be over time that we can understand how much the Bitcoin supply has been lost," Farrell said Experienced investors with a large amount of Bitcoin typically store their cryptocurrency in encrypted cold wallets to prevent hacking attacks.
In these cases, it means that Bitcoin is not stored on exchanges like Coinbase, which provides a recovery process for the families of deceased clients.
Instead, these investors usually store their cryptocurrency on physical USB drives, which may seem meaningless to some and can easily be lost or overlooked in the chaos of estate cleaning.
The decentralized nature of Bitcoin means that without the private keys to a wallet or hard drive, no bank or institution can access or recover the assets.
"Unlike traditional financial accounts, there is no institution that can contact you to recover cryptocurrency for holders. If no one knows your private key, your assets will be permanently locked," said Eric Lemieux, CEO of Wealthica.
He added, "If you store Bitcoin in a cold wallet and one day you pass away without giving anyone the private key to withdraw the Bitcoin, then those Bitcoins may be lost forever."
Lemieux stated that Bitcoin investors who keep their assets in cold wallets must ensure that their estate planning "includes your private key or a phrase that can recover assets through a lawyer or secure storage."
Otherwise, more Bitcoin losses could mean driving up its price