Bitcoin has reached a pivotal point in its history, with its total circulating supply crossing the 95% threshold of its 21 million hard cap. With over 19.95 million bitcoins now in circulation since the network’s launch on January 3, 2009, fewer than 2.05 million BTC are left to be mined. This milestone raises important questions about the future of the world’s first cryptocurrency and its long-term value.

Reinforcing the Narrative of Digital Scarcity

According to Thomas Perfumo, a global economist at crypto exchange Kraken, this event is a powerful reminder of Bitcoin’s core value proposition. He explained that hard money “requires a credible narrative for people to confidently adopt a currency as a store of value.” With Bitcoin’s annual supply inflation now around a mere 0.8%, its scarcity is becoming more pronounced.

Perfumo noted that the milestone validates the network’s resilience and predictable design after nearly 17 years of operation. “Bitcoin uniquely combines its functionality as a global, real-time and permissionless settlement protocol with the certainty of authenticity and scarcity you’d expect from a masterpiece like the Mona Lisa,” he said. “This milestone is a reminder of Bitcoin’s resistance against debasement and intervention.”

A Psychological Event, Not an Immediate Price Catalyst

While a shrinking supply might seem like a direct driver for price increases, analysts suggest the market impact won’t be immediate. Jake Kennis, a senior research analyst at Nansen, believes the 95% mark is more of a narrative event than a direct price catalyst, as the market has long been aware of Bitcoin’s predictable issuance schedule.

Instead, the event strengthens Bitcoin’s “digital gold” narrative and highlights its predictable scarcity in an era of unlimited fiat money printing. “The real story isn’t the 95% number itself, but Bitcoin’s supply schedule working exactly as designed,” Kennis stated. He added that the final 5% of bitcoin will take well over a century to be mined due to the network’s halving events, which systematically reduce mining rewards approximately every four years.

A Signal of Maturity for Institutional Players

Marcin Kazmierczak, co-founder of RedStone, agrees that the milestone is unlikely to move markets on its own. He argues that the crypto’s supply dynamics are well-understood and have been gradually absorbed by investors over the last decade. In his view, factors like the macroeconomic context, adoption trends, and regulatory clarity are far more important for Bitcoin’s price.

However, Kazmierczak sees the event as a symbol of Bitcoin’s evolution. “What this does represent is Bitcoin’s maturity—we’re moving from a growth-phase asset toward one with fixed, predictable long-term scarcity,” he explained. This predictability is a valuable trait for attracting long-term institutional investment.

The Shifting Economics of Bitcoin Mining

The dwindling supply of new bitcoin has significant consequences for miners. Following the April 2024 halving, which cut block rewards to just 3.125 BTC, miners are under increasing pressure. Kennis explained that miners must rely more on transaction fees for profitability, a trend that the 95% milestone underscores.

This economic shift is expected to fundamentally alter the mining landscape. As block rewards diminish, the network will transition to a model primarily sustained by transaction fees. “This creates pressure on miners to consolidate or seek efficiency gains,” said Kazmierczak, suggesting that less efficient operations may be pushed out of the market over time.