- 460,000 previously dormant BTC have re-entered the market, impacting supply and demand
- Increased liquidity from reactivated coins could lead to short-term volatility and price fluctuations
In a surprising turn of events, 460,000 previously dormant Bitcoin [BTC] have recently re-entered circulation, sending ripples through the market. These “lost” coins, once thought to be inaccessible, are now actively circulating again.
This shift raises important questions about BTC’s perceived scarcity and its potential impact on the market.
Understanding Bitcoin’s scarcity and its impact on value
Bitcoin’s value is intrinsically tied to its scarcity. With a total supply capped at 21 million coins, Bitcoin is designed as a limited resource, and this finite supply has long been a key driver of its value.
The principle of supply and demand dictates that when an asset is scarce, its perceived value increases – especially when demand remains steady or rises. This scarcity narrative has bolstered Bitcoin’s reputation as “digital gold,” a store of value.
The return of dormant Bitcoins
The reactivation of dormant BTCs, particularly since 2024, marks a shift in Bitcoin’s market dynamics. Around 460,000 BTC, once thought lost, have resurfaced, largely driven by the launch of the Bitcoin ETF.
This surge in long-held coins suggests growing confidence among LTHs, who are capitalizing on the current bullish cycle. As these coins become active again, the available circulating supply of Bitcoin increases, which could have broader implications for its scarcity narrative.
Source: Alphractal
While BTC’s total supply is fixed, the availability of dormant coins re-entering the market challenges the notion of scarcity.
This influx may temporarily dilute the asset’s perceived scarcity, especially if these coins are sold quickly into the market, potentially creating short-term volatility.
How reactivated coins affect BTC’s scarcity narrative
Source: Alphractal
The return of dormant coins could disrupt the long-standing scarcity narrative that has defined Bitcoin’s value. Although Bitcoin remains limited in total supply, the reactivation of these coins increases the effective circulating supply, changing the balance between supply and demand.
In the short term, this could undermine BTC’s perceived scarcity, especially if significant amounts of BTC are moved onto exchanges and sold. This influx of supply might temporarily weigh on BTC’s value until the market absorbs the coins.
Bitcoin’s future in a more liquid market
The situation introduces additional liquidity into the Bitcoin market, with both positive and negative implications. On one hand, increased liquidity facilitates smoother trading and more market efficiency.
Read Bitcoin’s [BTC] Price Prediction 2025–2026
On the other hand, a sudden surge in active supply could lead to price volatility, particularly if large amounts of Bitcoin are sold at once.
Over time, this increase in liquidity could influence BTC’s price stability, potentially reducing speculative spikes and fostering more sustainable growth.
