BlackRock: Bitcoin Scarcity Could Hinder the Wealthy from Owning It

BlackRock, the world’s largest asset management firm, has highlighted the challenges posed by Bitcoin’s fundamental scarcity and its impact on wealthy investors.

According to a report published by The Street and reviewed by Al Arabiya Business, BlackRock analysts pointed out that Bitcoin has a fixed supply of 21 million units, but only 3 to 4 million are actually available for trading. This limited supply may not be sufficient to meet the potential demand from high-net-worth individuals.

In their analysis, Michael Gates and Brett Wager, portfolio managers at BlackRock, explained that Bitcoin issuance will follow a pre-determined schedule until 2140, with a hard cap of 21 million coins. However, they emphasized that the actual tradable amount is significantly lower, as an estimated 3 to 4 million bitcoins are permanently inaccessible due to lost or forgotten private keys, making them effectively removed from circulation.

The experts noted that Bitcoin’s scarcity poses a challenge for wealthy investors, unlike gold. They added: “To put its limited availability into perspective, if every millionaire in the United States asked their financial advisor to buy just one Bitcoin, there wouldn’t be enough supply to meet the demand.”

Data shows that the United States has approximately 22 million millionaires, meaning that one in every 15 Americans has a net worth exceeding one million dollars, according to the latest UBS Global Wealth Report. This suggests that the potential demand for Bitcoin from wealthy individuals in the U.S. alone could far exceed the available supply.