Fidelity Warns: Nearly 30% of Bitcoin Could Be a “Dead Asset” by 2035 Why Is This a Concern?

A new report from Fidelity Digital Assets, the digital asset management arm of Fidelity Financial, reveals an alarming trend in the Bitcoin space: more and more BTC is becoming “old,” meaning it hasn’t been moved or used in more than a decade. According to the study, more than 17% of the total Bitcoin supply has not seen any activity for at least 10 years, with an estimated value of $360 billion.

If this trend continues, Fidelity estimates that nearly 30% of the total Bitcoin supply could be “dead” by 2035. This raises serious questions about Bitcoin’s liquidity, circulation, and role as a decentralized currency.

What is “old” Bitcoin and why is it gaining popularity?
The term “ancient Bitcoin” refers to BTC that has not moved on the blockchain for at least 10 years. These coins may belong to long-time HODLers, or worse, have been completely lost due to lost private keys, inaccessible wallets, or the owner’s death.

Fidelity notes that every day, approximately 566 BTC become “ancient,” meaning they have not been used and have passed the 10-year mark since their last transaction. Meanwhile, the number of new BTC mined each day is only 450. This imbalance suggests that the rate at which Bitcoin is “immobilized” is outpacing the ability of mining to replenish new supply.

Supply is shrinking while demand is growing
The reality is that the active supply of Bitcoin is shrinking while demand from institutions, ETFs, and individual investors is growing stronger. For example, ETF issuers like BlackRock, Fidelity, and Ark Invest are constantly buying BTC from the open market to support their funds. This is causing the circulating supply to be increasingly depleted.

Fidelity warns that if there are not enough BTC in circulation to meet demand, liquidity will be threatened. A market with a limited supply can be easily manipulated by whales, organizations or individuals who hold large amounts of BTC. The fewer coins in circulation, the stronger the influence of large holders becomes.

Lost Bitcoin: A Portion That Cannot Be Recovered
Another major issue highlighted by the report is the amount of Bitcoin that has been permanently lost. An estimated 20% of the total supply, or nearly 4 million BTC, cannot be recovered for a variety of reasons, from lost private keys to user error. Additionally, over 1.8 million BTC believed to belong to Satoshi Nakamoto, the mysterious founder of Bitcoin, have not been used since 2009.

In total, millions of BTC are permanently out of circulation, significantly reducing the actual tradable supply.

Long-term impacts on markets and policy
This situation poses several challenges for the future of Bitcoin:

Reduced usability as currency: When a large portion of BTC is not transacted, it becomes difficult to use it as a means of payment or for everyday use. This undermines the argument that Bitcoin can replace fiat money.

Increased price volatility: The reduced supply makes the market vulnerable to large trades. If a few whales sell off, the price could plummet due to a lack of countervailing buying power.

Difficulty in financial policymaking: Predicting the actual usable supply becomes difficult. This makes it difficult for institutions, investors, and governments to build investment strategies or monitor risks.

Opportunities and challenges for the future of Bitcoin
While Fidelity’s findings present a worrying outlook, they also reflect the reality that Bitcoin is increasingly becoming a store of value rather than a mere payment instrument. In the eyes of many long-term investors, especially institutions, keeping BTC in place is a strategy to protect assets against inflation and financial instability.

However, for Bitcoin to maintain its role in the global financial ecosystem, the community and developers will need to come up with solutions to boost circulation without breaking the core decentralization principles of the network. Some proposals include creating additional transaction layers like the Lightning Network, or improving the usability of wallets and private key recovery tools.

Conclusion
The Fidelity report is a wake-up call to the community about a problem that is quietly accumulating in the Bitcoin network. Increasingly, BTC becoming “old” can reduce the efficiency of the network, threatening liquidity and the fair distribution of assets.

While Bitcoin remains the leading digital asset and a trusted store of value, the challenges of supply and real-world use need to be taken seriously to ensure the sustainability of the entire ecosystem.