Bitcoin’s Scarcity is Increasing and Market Dynamics are Changing

Bitcoin’s halving process causes the slowing down of supply and thus makes BTC scarce. With each halving event, it has been proven that Bitcoin becomes a less available asset than gold according to the stock-to-flow (S2F) model. According to Bybit analysts, the upcoming halving will make Bitcoin twice as scarce as gold. This increases the possibility of reserves on central exchanges being depleted within nine months, thereby foreseeing a potential supply shortage. Bitcoin to Become Twice as Scarce as Gold Expectations after halving show that Bitcoin’s stock-to-flow ratio will increase to 112, surpassing gold’s S2F ratio. This will further limit Bitcoin’s supply in the market and likely create an upward pressure on prices. Supply Shortage May Come After Halving Halving event naturally restricts Bitcoin production and therefore inevitable creates a supply shortage. While spot Bitcoin exchange-traded funds (ETFs) are typically backed by supply from central exchanges, with halving, a decrease […]

Bitcoin’s Scarcity is Increasing and Market Dynamics are Changing

Bitcoin’s halving process causes the slowing down of supply and thus makes BTC scarce. With each halving event, it has been proven that Bitcoin becomes a less available asset than gold according to the stock-to-flow (S2F) model. According to Bybit analysts, the upcoming halving will make Bitcoin twice as scarce as gold. This increases the possibility of reserves on central exchanges being depleted within nine months, thereby foreseeing a potential supply shortage.

Bitcoin to Become Twice as Scarce as Gold

Expectations after halving show that Bitcoin’s stock-to-flow ratio will increase to 112, surpassing gold’s S2F ratio. This will further limit Bitcoin’s supply in the market and likely create an upward pressure on prices.

Supply Shortage May Come After Halving

Halving event naturally restricts Bitcoin production and therefore inevitable creates a supply shortage. While spot Bitcoin exchange-traded funds (ETFs) are typically backed by supply from central exchanges, with halving, a decrease in this supply is expected. Miners and investors will reduce selling tendencies due to reduced block rewards, further limiting Bitcoin supply on exchanges.

Complex Cycle

Despite having a significant impact on Bitcoin prices, analysts note that the cycle is becoming increasingly complex. Unlike previous halvings which resulted in price rallies, post-event dynamics are expected to change this time, leading to an increase in demand for spot Bitcoin ETFs and an associated rise in prices.

Takeaways for the Reader

Halving increases Bitcoin’s scarcity by reducing its supply, potentially leading to price increases.
The rapid depletion of Bitcoin reserves on central exchanges and its potential impact on supply shortage should be considered.
Investors should review their strategies by taking into account the effects of halving events on the market.

In conclusion, Bitcoin’s halving process offers significant dynamics for investors and market observers due to its impact on supply and price fluctuations. Halving stands out as a critical factor that can potentially increase the value of Bitcoin.

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