What Happens to Bitcoin When You Die?

The Problem

When a bank account holder dies, the bank follows an established process. Executors present a death certificate and a grant of probate, and the bank releases the funds to the estate. The money does not vanish. It does not become inaccessible. The system is designed around the assumption that people die and their assets need to be transferred.

Bitcoin has no such process. There is no bank. There is no customer service line. There is no recovery team. Bitcoin exists on a decentralised network maintained by thousands of computers around the world, and the only thing that grants access to any Bitcoin is possession of the private key — a string of characters that functions as the ultimate password.

If you die without leaving your private keys accessible to someone, your Bitcoin is gone. Not frozen. Not delayed. Gone — permanently and irrecoverably removed from the circulating supply.

Self-Custody vs Exchange-Held Bitcoin

What happens to your Bitcoin when you die depends on how you hold it.

Self-Custody

If you hold your own keys — whether on a hardware wallet, in a software wallet, or written on paper — then your Bitcoin is controlled entirely by those keys. When you die, the Bitcoin does not know or care. The blockchain continues operating exactly as before. Your wallet continues to exist at its address, holding its balance, waiting for a transaction signed by the private key.

If nobody else has the key, nobody can move the coins. They will sit on the blockchain indefinitely — visible to anyone who looks but accessible to nobody. This is what happened to the estimated 1.1 million BTC mined by Satoshi Nakamoto. The coins are there. They can be seen. But without the keys, they are functionally destroyed.

Exchange-Held Bitcoin

If your Bitcoin is held on an exchange like Coinbase, Kraken, or Binance, the situation is different but not necessarily better. The exchange holds the private keys on your behalf, so the coins are technically accessible. But the exchange will not release them without a legal process.

Most major exchanges have bereavement or estate recovery processes. These typically require the executor to provide a death certificate, a grant of probate, proof of the deceased’s identity, and proof of the executor’s authority. The process can take weeks or months and may involve legal teams in multiple jurisdictions.

The critical difference is that exchange-held Bitcoin is recoverable in principle, while self-custody Bitcoin without accessible keys is not recoverable at all.

Why Standard Estate Planning Fails

Traditional estate planning was designed for traditional assets. A will distributes property, bank accounts, investments, and personal possessions. The executor identifies assets, the solicitor handles the legal process, and the beneficiaries receive their inheritance.

This process breaks down with Bitcoin for several reasons.

Discovery. Executors cannot discover crypto holdings through normal channels. There is no central registry of cryptocurrency owners. If the deceased did not document their holdings, the executor may not even know they exist.

Access. Even if the executor knows about the Bitcoin, they need the private key or seed phrase to access it. A will can say “I leave my Bitcoin to my daughter” — but without the key, the instruction is meaningless.

Security. Private keys cannot safely be included in a will. Wills become public documents after probate. Anyone who sees the will could access the Bitcoin before the intended beneficiary. This creates a direct conflict between the legal process and the security requirements of cryptocurrency.

Volatility. Bitcoin’s price can move dramatically during the months-long probate process. An estate valued at £100,000 in Bitcoin at the time of death could be worth £50,000 or £200,000 by the time it is distributed. This creates complications for inheritance tax calculations and for fair distribution among beneficiaries.

The Scale of the Problem

The numbers are sobering. Chainalysis estimates that between 2.78 and 3.79 million Bitcoin are permanently lost — roughly 17-20% of all Bitcoin ever mined. While not all of this is attributable to death, a significant portion belongs to early adopters who died without leaving access instructions.

In the UK alone, an estimated 2.3 million adults hold cryptocurrency. As this population ages, the inheritance problem will grow. Without intervention, billions of pounds worth of Bitcoin will be lost over the coming decades — not through hacking or theft, but simply through the failure to plan.

What You Can Do

The good news is that the problem is entirely preventable. It requires effort, planning, and a willingness to think about uncomfortable scenarios — but the technical solutions exist.

Create a digital asset inventory. List all your cryptocurrency holdings: what you own, where it is held, and how to access it. Update this regularly.

Write a letter of wishes. A letter of wishes is a non-binding document that accompanies your will. Unlike the will itself, it does not become public after probate. Use it to provide technical instructions for accessing your crypto.

Store your seed phrase securely. Your seed phrase should be backed up in a durable, recoverable format — but not in a way that exposes it during your lifetime. Metal backups, sealed envelopes with solicitors, and Shamir’s Secret Sharing are all options.

Tell someone. At minimum, one trusted person needs to know that you hold cryptocurrency and where to find the recovery instructions. They do not need to understand Bitcoin. They need to know that the instructions exist and where to find them.

Consider multi-signature setups. Multi-sig wallets require multiple keys to authorise a transaction. A 2-of-3 setup can allow your heirs to access funds without any single person holding full control during your lifetime.

The Bottom Line

Bitcoin was designed to be controlled by whoever holds the keys. This is its greatest strength and its greatest vulnerability. The same feature that protects your Bitcoin from seizure, fraud, and institutional failure also means that your family cannot access it without your help — and once you are gone, you cannot provide that help.

Planning is not optional. It is the difference between leaving your family a legacy and leaving them a loss.

Bitcoin Inheritance Planning (UK) — A step-by-step framework for ensuring your family can access your Bitcoin.
Seed Phrase Inheritance — How to securely store and pass on your recovery phrase.
How to Pass Bitcoin to Your Family — Recovery packs, practice sessions, and handover plans.
Gerald Cotten: The CEO Who Took $190M to His Grave — What happens when the only person with the keys dies.
Stefan Thomas: 7,002 BTC Locked Behind a Password — A cautionary tale of single-point-of-failure security.