Estimating the Number of Lost Bitcoin

As of early 2025, analysts estimate that between 2.3 million and 3.7 million Bitcoins are permanently lost, representing approximately 11–18% of Bitcoin’s fixed maximum supply of 21 million coins, with some reports suggesting losses as high as 4 million BTC. This impacts the effective circulating supply—while the total mined Bitcoin stands at around 19.8 million BTC, the usable amount is closer to 15.8–17.5 million BTC after accounting for these losses, highlighting a significant reduction in accessible coins despite the unchanged maximum supply of 21 million BTC.

But what does that mean, exactly? How can Bitcoin be lost? Today, let’s tackle this phenomenon and help you understand how Bitcoin really works.

What Exactly Does “Lost” Bitcoin Mean?
Bitcoin can indeed be “lost,” but this doesn’t mean it disappears entirely—instead, it becomes permanently inaccessible. This happens when a user loses, forgets, or destroys their private key, a unique secret code that serves as the only way to access and spend their Bitcoin.

Without this key, the Bitcoin remains locked on the blockchain, a decentralized public ledger that records all transactions. Unlike traditional banking systems where a lost password might be reset by a central authority, Bitcoin’s decentralized design offers no such recovery option. As a result, lost Bitcoin is effectively removed from circulation, reducing the available supply of the cryptocurrency, which is capped at 21 million coins.

Even when Bitcoin is lost, it still technically exists on the blockchain—it’s just unusable without the private key.

Think of it like a vault with a lost combination: the contents are still inside, but no one can get to them. This highlights a key feature of Bitcoin’s security and autonomy: there’s no central entity to step in and help recover lost keys, placing full responsibility on the user to manage them securely. Additionally, some Bitcoin is intentionally “burned” by sending it to addresses with no known private key, further shrinking the circulating supply.

In short, lost Bitcoin is a real and irreversible risk. Well, if you were to ask its creator, he would say (and we quote) “Lost coins only make everyone else’s coins worth slightly more. Think of it as a donation to everyone.” Either way you look at it, it’s important to safeguard your private keys at all costs.

There's no such thing as a secure password manager. The LastPass password hack may be the most recent or popular case. However, others like 1Password, Norton LifeLock, Bitwarden etc, have also suffered security breaches. So it doesn't matter which password manager you choose, they are often targeted by hackers and it's a dumb idea to store the seed phrase electronically. The safest method of storage is by using a piece of paper or metallic steel plate.

You are not getting it.  A seed phrase is not a password - its the master key to your whole crypto stash.  Equating it to a banking login misses how dangerous it is.  A password manager keeps all your different logins handy so you can easily use websites and stuff.  But I dont really see why you would save a seed phrase in there when you barely ever need it, if at all.

Your approach introduces a single point of failure that is entirely avoidable. Dont store your seed phrase online, period. Its not "an option worth considering"; its a major security flaw.

I disagree. Which is why I suggested using at least two layers of security including passphrases, encrypted files,
2 factor authentication, etc. If one layer ever fails you are still protected by the others.
So there has to be multiple points of failure before anyone can access your bitcoin.

I would argue storing your private key in a physical location can be considered a single point of failure.
Because if you lose it or it is stolen, or destroyed by a natural or man-made disaster, then there is not
much you can do to get it back.

How many bitcoins have been lost due to hacked PMs? I don't know of even one bitcoin that was
(verifiably) lost that way. So statistically you are far more likely to lose your bitcoin because you lost
the physical backup of your seed phrase then your PM getting hacked. But do whatever you feel comfortable with.
There is no right or wrong answer. The best method for one person may not be the best for someone else.

This is not a guarantee that a password manager is safe. You can choose to keep certain information and data in a password manager, but I don't think it is appropriate to consider a password manager the best place for the storage of your seed phrase and other sensitive information.

As long as a password manager remains centralized, no matter how safe you think it is, you should never consider it a safe place for your seed phrase. When using a decentralized wallet to invest in Bitcoin, one should expect to be their own manager of a seed phrase to keep it safe from the eyes of a third party.

How many bitcoins have been lost due to hacked PMs? I don't know of even one bitcoin that was
(verifiably) lost that way.

Or alternatively you can probably change some of the words in your phrase that only you can know so even if it's stolen you're the only one who can access it.

The conventional wisdom is to never store your seed phrase online.

Bitcoin wallets used by millions of investors, such as Electrum, are also software that is available for download. Computer or phone operating systems are software available for download. Are you using and trusting it?
Likewise, there are many open source, self-hosted, password managers that are very reliable to use. Don't jump to conclusions, they are unsafe and unreliable when you haven't even taken the time to learn about them.

You store them by writing them on paper or engraving them on steel plates, titanium...that does not mean you are safe, you also face risks such as fire, flood, loss...Each has its own advantages and disadvantages.