Bitcoin On-Chain Analysis: ‘Free Float’ Indicator Shows Untapped BCH and BSV Supply

Data analysts website, Coinmetrics, released a new on-chain indicator, the ‘free float supply of cryptocurrencies.’ A look at the free float of Bitcoin and its hard forks reveals that coins haven’t yet been claimed by many users. Moreover, the difference between current and free float supply is way smaller is other altcoins. 

The free float supply represents the number of assets that is currently liquid in the market (available for immediate purchase). The difference in their supply takes us back to a journey to the early days in Bitcoin.

Unmoved Bitcoins

Bitcoin [BTC] itself shows a discrepancy between the current and free float supply of about 24% (4.1 million coins). These seem to include the coins lost ‘in limbo’ (to eternity). The lost coins include lost private keys and thefts dating back to 2010. It also seems to account for coins that haven’t been moved since for a long-time (> 5-year hodl wave percentage is at the peak at 5.77%). These account for at least 3 million of the unmoved supply, which is bound to resonate on BCH and BSV.

The Fork Story

However, given that rest of the coins were mined after the fork, the difference the free float supply confirms Nic’s claims. The percentage of ‘not free float supply’ of BCH and BSV is 34.8% and 46.1%. Given, BSV was forked out of BCH, the difference represents the second degree of cryptocurrency users opting out. Moreover, it also threatens a potential sell-off in the market from those users who can still claim their forked coins.

Leading on-chain analyst, Nic Carter, noted in a sarcastic tone,

You ever get the feeling that the ‘market cap’ of forks is overstated because half of those coins aren’t even activated on the fork? yeah, me too.

A look at the realized capitalized of the hard fork portrays a worse image. The realised (on-chain) capitalization of BTC has been making new All-Time Highs (currently at $107.1 billion), while BCH and BSV have failed to gain much on-chain traction since the forks. The realised capitalization of BCH and BSV is 4.4% and 1.3% of BTC.

The free float supply of other top altcoins (ETH, LTC, XMR, EOS, and so on) is almost at par with their current supply.

What do you think about the free float supply of pre-mined coins like XRP? Please share your views with us.