Willy Woo, a renowned crypto market analyst, has warned that Bitcoin may remain under bearish conditions due to the threat posed by four million coins that may soon reenter circulation. Woo noted that the market was already pricing in this risk, which has led to Bitcoin losing its 12-year upward trend against gold.
Willy Woo Exposes Bitcoin’s 4M Risk
In an X post, Woo stated that the growing quantum threat could enable the recovery of four million BTC that were previously lost. His remarks stem from concerns that, with quantum computing, lost keys could be recovered, and new coins could reenter circulation, creating a supply overhang.
“Likely, BTC will be patched with quantum-resistant signatures. This doesn’t fix the issue of 4M lost coins coming back into circulation. I’d say it’s 75% chance that lost coins will not be frozen by a protocol hard fork. So the risk-adjusted sale of 4M coins needs to be priced in,” he opined.
Woo further highlighted the magnitude of this new supply. According to his analysis, only 2.8 million BTC have been accumulated by institutional investors and spot exchange-traded funds (ETFs) since 2020. Hence, for four million coins to be fully absorbed, institutions would require eight years.
The analyst noted that this threat may be behind Bitcoin’s suppressed performance because the market has been pricing in the return of these coins in advance. He added that these concerns are why gold is outperforming Bitcoin. The 12-year trendline in Bitcoin vs. gold broke for the first time when quantum computing became a factor.
The cryptocurrency community has responded to Woo’s analysis, with some arguing that the four million coins will not cause a supply overhang. Per analyst Quinten, even if the coins are recovered, BTC’s supply will remain at 21 million coins as has always been the case.
Another analyst added that Woo’s remarks suggest that the Bitcoin bottom may be in, as they resemble an FUD campaign. Meanwhile, Bitcoin advocate Samsom Mow opined that arguments about the threat posed by quantum computing to Bitcoin are unfounded.
“Believing that quantum computers pose a threat to Bitcoin may prove to be the last great transfer of BTC from the foolish to the wise,” Mow said.
Amid this development, Bitcoin has continued to experience volatile price movements, trading at $67,261 at press time with an intraday loss of over 1%.
Source: https://zycrypto.com/crypto-analyst-willy-woo-warns-bitcoin-faces-a-risk-of-4-million-lost-coins-heres-why/
