Are marketcaps real if we consider lost wallets?

Hello everyone, I hope you're having a nice weekend. Today I have been thinking about market cap and how cryptos are valued.

We all understand how to make out a tokens market cap, we take the token price and multiply it by the circulating amount and bingo. In the example below, you can see this being reversed to confirm. This is the simple way to get a ballpark figure. There is a much more complex and accurate way to do it. Let's use BTC as an example because its circulating supply is researched and wrote about the most and easiest to get quick numbers.

1 = Total BTC marketcap
2 = Total BTC is supply

The calculation confirms that the Bitcoin market cap total is based on token price multiped by circulating supply.

Problem is there are alot of BTC that have been lost, seized, sent to null addresses and wallets containing vast amounts stolen from hacks that remain untouched. The actual circulating supply and therefore real market cap is not accurate. This is true of most crypto's. I have seen in a few reports over the years stating that roughly 4% of crypto each year is lost/misplaced. They were talking about BTC, im sure many other cryptos have a much lower rate. It's pretty hard to lose HIVE as an example because of username addresses. of the tokens are in circulation, a huge percentage is held by exchanges, investment funds, defi platforms and other custodians. This means that the actual amount in general circulation is maybe 20-30% at most of the reported circulating supply.

Rough statements say that there are currently 13.5 Million BTC in circulation which would suggest either a real market cap of $614 Billion or BTC revaluation to $63,439 to keep its current market cap of $856 billion. I consider lost tokens gone forever. The 7th biggest BTC wallet was seen by hackers in 2018 on "all private keys" which is a service website to help people get into wallets they are locked out of. The wallet contains 69,300 BTC worth $3.2 billion and hackers from all over the world have been trying to access this wallet ever since with no success. Huge wallets that contain hundreds of millions of stolen $, that cant be touched due to fear of being caught are they did the hack for fun and threw the private keys away and gone forever.

This is true of most crypto's, even HIVE. Is the @null included in the circulating supply? I think the amount of lost HIVE would be lower than BTC because addresses are simple usernames and we can not send a transaction to an account that has not been created yet. But we really have no idea what the real circulating supply of HIVE is are any crypto for that matter.

Im sure this is also true on a much smaller scale with stock and shares as well. I would guess most lost shares would be due to investor death. We dont transact stocks and shares P2P in general, it's always done by a 2nd party and held by the broker so losing stocks is actually very hard but im sure the actual circulating supply of individual stocks is lower than reported.

Anyways, I was daydreaming staring at the price of BTC and this thought came across my mind. It would be really cool if there were a website that tracked the circulation supply live, maybe it already exists. Im sure it would be very hard to track because wallets could be abandoned for 5+ years with no activity, not even logging into the wallet and owned by some super early super-rich investor that doesn't need the money. Maybe Satoshi returns and claims his 1.1 million BTC wallet, we never know in crypto.

What do you think about this? Do you think my thinking is right or wrong and the market cap should total circulating supply? or should burn wallets and confirmed lost wallets be taken away? I guess there is always the chance some nerd finds a way to hack any wallet and take all the funds, all the BTC.

Thanks for reading through the post, let me know what you think about this or if you found it interesting.

I think the amount of lost HIVE would be lower than BTC because addresses are simple usernames and we can not send a transaction to an account that has not been created yet. But we really have no idea what the real circulating supply of HIVE is are any crypto for that matter.

Hive can be tracked and we have a bunch of keys, recovery accounts that can help you recover your account, however, there are a bunch of dormant accounts that may or may not be active in the future.

The other day I saw a wallet containing 55k HIVE, the user may not even know he has it as he has never been active on HIVE. Which means there's still a chance for them to use it, but who knows. These wallets always have to be counted as uncertain. I bet once HIVE gets to $10 or higher, a few may remember they have had some HIVE once, come back and sell it.

We're never going to know the exact market cap actually, of any asset as there's always a chance to recover your account. There are people offering recovery services.

Anyway, interesting topic.

Posted Using LeoFinance ^Beta