Bitcoin’s fixed supply cap has long been one of its most defining features—offering scarcity in a world of infinite digital creation. Now, BlackRock, the world’s largest asset manager, is sounding the alarm: there simply aren’t enough accessible Bitcoin to meet even a fraction of potential demand from American millionaires.
In a recent report titled “Why Bitcoin? A Perspective from Model Portfolio Builders,” analysts Michael Gates and Brett Wager from BlackRock’s Model Portfolio Solutions team explore the unique dynamics of Bitcoin’s supply and demand structure. Their findings suggest a looming supply shock scenario—one that could significantly impact Bitcoin’s long-term value proposition.
Bitcoin’s Inelastic Supply: A Fundamental Difference
Unlike traditional assets such as gold, Bitcoin’s supply is inelastic—meaning it cannot respond to increased demand with higher production. Gold mining operations can scale up when prices rise, bringing more supply to market. Bitcoin, however, operates on a hard-coded issuance schedule: only 21 million BTC will ever exist, and new coins are released at a predictable, decreasing rate through block rewards.
“As many know, there is a predictable issuance schedule of new bitcoin until 2140 with a pre-programmed max supply of 21 million tokens. However, less widely known is that the real available float is likely far smaller, with a conservative estimate of 3 to 4 million issued bitcoins visible on the blockchain but considered permanently inaccessible (and therefore out of circulation) due to lost, forgotten, or otherwise destroyed keys.”
This means the actual circulating supply of Bitcoin may be as low as 17 to 18 million coins. When factoring in lost keys and long-term holders (often referred to as "HODLers"), the amount of BTC truly available for trading or acquisition is even tighter.
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A Supply Crisis in the Making?
To put this scarcity into perspective, BlackRock presents a striking hypothetical:
“To illustrate how few available bitcoins there are, if every millionaire in the US asked their financial advisor to get them 1 bitcoin, there wouldn’t be enough.”
There are approximately 7.3 million millionaires in the United States as of 2025. Even if all 18 million circulating BTC were available—which they’re not—simple math shows the shortfall. And when you consider that millions of coins are held by early adopters, locked in long-term wallets, or irreversibly lost, the gap widens dramatically.
This imbalance between limited supply and growing institutional and retail interest sets the stage for intense competition over ownership—a dynamic that could fuel significant price appreciation over time.
Why Bitcoin Matters to Institutional Investors
Despite volatility and regulatory uncertainty, BlackRock identifies several compelling reasons why Bitcoin deserves a place in diversified investment portfolios:
- Store of Value: Bitcoin’s scarcity and decentralized nature make it a potential hedge against inflation and currency devaluation.
- Monetary Alternative: It offers an alternative to traditional financial systems, particularly amid concerns about US dollar dominance and geopolitical instability.
- Digital Transition Proxy: As economies shift from offline to online ecosystems, Bitcoin serves as a foundational asset in the emerging digital economy.
- Demographic Tailwinds: The wealth transfer from baby boomers to millennials—digital natives who are more open to crypto—could accelerate adoption.
“Collectively, these features may help provide unique and additive sources of risk premia and diversification to traditional multi-asset portfolios.”
These arguments align with BlackRock’s broader push into digital assets, including its spot Bitcoin ETF filings and ongoing blockchain integration initiatives.
The Role of Lost Bitcoins in Market Scarcity
One often overlooked factor in Bitcoin’s supply equation is the sheer volume of permanently lost coins. Early miners who discarded hard drives, users who forgot passwords, or those who sent BTC to incorrect addresses have effectively removed millions of units from circulation.
Blockchain analytics firms like Chainalysis estimate that between 3 to 4 million BTC are likely unrecoverable. That’s nearly 20% of the total supply—gone forever.
This immovable floor of lost supply intensifies the pressure on the remaining coins. As demand grows—fueled by ETF approvals, macroeconomic trends, and global adoption—the pool of available Bitcoin continues to shrink relative to demand.
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Market Implications of a Supply-Demand Imbalance
At the time of writing, Bitcoin is trading at $85,381, reflecting growing confidence among institutional players. But if BlackRock’s analysis holds true, current prices may only represent the beginning of a longer-term revaluation cycle.
When supply cannot meet demand, markets respond with higher prices. With new BTC issuance slowing every four years during halving events—and demand expected to rise due to ETF inflows, global monetary policies, and tech innovation—the stage is set for sustained upward pressure.
Moreover, as more investors recognize Bitcoin’s scarcity premium, allocation strategies may shift from speculative trading to long-term holding, further reducing liquidity and amplifying price volatility.
Frequently Asked Questions (FAQ)
Why is Bitcoin’s supply considered inelastic?
Bitcoin’s supply is inelastic because it cannot increase in response to rising demand. Unlike commodities like gold or silver, no new BTC can be mined beyond the 21 million cap, and the release schedule is fixed by code.
How many bitcoins are actually available for purchase?
While over 19 million BTC have been mined, estimates suggest only about 17–18 million are realistically available due to lost or dormant coins. Millions remain untouched for years, effectively reducing market liquidity.
Could Bitcoin ever run out?
In practical terms, yes—functional scarcity already exists. With millions of BTC lost forever and increasing institutional demand, accessible supply is dwindling rapidly.
What happens if demand exceeds supply?
When demand outpaces supply, prices rise. In Bitcoin’s case, this dynamic could lead to sharp rallies, especially during macroeconomic stress or major adoption milestones.
Is Bitcoin a good hedge against inflation?
Many investors view Bitcoin as "digital gold" due to its capped supply. Unlike fiat currencies that central banks can print endlessly, BTC’s scarcity makes it resistant to inflationary pressures.
How are millionaires influencing Bitcoin’s market?
Wealthy individuals and family offices are increasingly allocating to Bitcoin as part of portfolio diversification. Their buying power can significantly impact market dynamics, especially given limited supply.
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Final Thoughts: Scarcity as a Catalyst
BlackRock’s warning isn’t just theoretical—it’s a call to understand Bitcoin on its own terms. Its value isn’t derived from cash flows or dividends but from absolute scarcity, network security, and growing recognition as a global monetary asset.
As more institutions recognize that there simply aren’t enough Bitcoins to go around, early positioning becomes critical. Whether viewed as insurance against systemic risk or a bet on digital transformation, Bitcoin’s structural scarcity makes it unlike any other asset class.
For investors navigating an era of monetary uncertainty and rapid technological change, understanding Bitcoin’s supply constraints may be one of the most important financial insights of the decade.
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