Bitcoin lost through self-custody surpasses the amount lost on exchanges, according to River’s analysis.

The firm estimated that around 1.6 million Bitcoin (valued at over $1.5 billion) had been rendered inaccessible due to self-custody mismanagement, compared to 1.2 million (equivalent to more than $1.1 billion) lost in exchange-related incidents like the Mt. Gox hack and FTX’s bankruptcy.

River said it employed a detailed methodology that considers wallet inactivity over various timeframes. This approach uses probabilistic estimates to determine the likelihood of funds being permanently inaccessible.

For instance, wallets that have been dormant for over ten years, excluding those linked to Satoshi, represent the largest share of estimated losses. Conversely, wallets that have been inactive for shorter periods show significantly lower probabilities of loss.

Rivers said its refined estimate of 1.6 million lost BTC provides a more realistic outlook than earlier studies, such as the 2020 Chainalysis report that suggested that 3.7 million BTC were lost.