Bitcoin’s recent surge in price is not primarily driven by the upcoming US administration’s stance on the cryptocurrency, according to analysts. Instead, they point to a post-halving supply shock as the main reason behind the market’s upward trend.
The halving of block rewards from 6.25 BTC to 3.125 BTC in April reduced the overall supply of Bitcoin, leading to a demand-supply imbalance. With current prices unable to satisfy this demand, analysts predict that the price will continue to rise, fueling a potential bubble.
Onramp Bitcoin co-founder Jesse Myers and Onchain analyst James Check have both echoed this sentiment, citing historical patterns from previous halvings in 2012, 2016, and 2020. They argue that new supply creation is rarely consistent with such predictable price movements.
Currently, the total market cap of Bitcoin stands at $1.6 trillion, making it scarce compared to other assets like gold. With only about 1.2 million BTC left to be mined, analysts believe the scarcity will drive prices even higher, predicting a potential record high of $100K or more in the coming months.
Bitcoin exchange-traded funds (ETFs) have further exacerbated this demand-supply imbalance, with significant inflows seen recently. As US financier Anthony Scaramucci hinted at an upcoming strategic Bitcoin reserve and other countries’ adoption, analysts are confident that the market will continue to rise.
Source: https://cointelegraph.com/news/post-halving-supply-shock-drive-bitcoin-prices-higher