TL;DR: Heading into its first halving as a project, the number of bitcoin cash (BCH) in circulation is being debated. Crypto financial data provider for institutions, Coin Metrics, claims nearly a third of BCH has never been touched since it forked from BTC in August of 2017.

6 Million of the Bitcoin Cash Circulating Supply Has Never Moved

CRYPTOASSET FREE FLOAT: AN EXPLORATION OF SUPPLY DYNAMICS is a recent Coin Metrics publication, detailing in 12 pages the problem in getting accurate information with regard to cryptocurrency analytics. Among the conceptual issues involved include current supply numbers, reported supply, and various incentives to keep that data close to the vest.

“Supply, however, still remains a hotly debated topic within the cryptoasset ecosystem,” the report stressed. “While decentralized cryptoassets are, by definition, open networks with readily available on-chain data, reporting of token holdings is far from transparent (often very intentionally). Further, in these early and nascent stages of the ecosystem, multiple token economic models have been developed (fair launch, ICOs, IEOs, premines, hard forks, etc.), adding complexity to determination of assets that are considered ‘available’ for trade.”

And while “there are no provably lost BCH, no Bitcoin Cash Foundation wallets, no

founding team tokens, no vested tokens and no burned tokens,” the 18.4 million BCH circulating supply can be misleading or at least conditional. Since August 2017, “not all BCH tokens have been activated (i.e. moved on-chain since the fork),” Coin Metrics documented. In fact, some 6 million BCH lay dormant.

For investors and analysts alike, a series of questions arise as a result. “Due to the pseudonymity of Bitcoin and Bitcoin Cash,” the report explained, “we do not understand who these token holders are and cannot predict what their actions will be in the short/mid or long term (e.g. are they going to ever claim their tokens? Are they aware of their right to claim? Do they know how to claim? Do they still own their BTC keys so that they can claim?). With so much uncertainty, the conservative approach is to not overrepresent Bitcoin Cash’s supply and liquidity and to consider these un-activated tokens as unavailable to the market,” ultimately yielding a free float BCH supply of an adjusted 12.4 million.

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DISCLOSURE: The author holds cryptocurrency as part of his financial portfolio, including BCH.