Bitcoin Halving to Trigger Unprecedented Scarcity, Fueling Price Surge

Bybit's report examines the impact of the upcoming Bitcoin halving on supply dynamics within crypto exchanges. As the halving reduces the supply of BTC by 50%, exchanges will face a substantial supply squeeze, with only nine months of BTC supply remaining. This scarcity, combined with reduced sell-side supply, will enhance the rarity of BTC, propelling it to become even more scarce than gold. The report predicts that this supply squeeze could drive the price of BTC significantly higher, although it may not match the pre-halving surge.

Bitcoin Halving Event to Create Unprecedented Scarcity, Driving Price Surge

April 18, 2024

Bybit Report Illuminates Impact of Bitcoin Halving on Supply Dynamics

Bybit, a prominent cryptocurrency exchange and trading platform, has released a comprehensive report analyzing the impending Bitcoin halving event and its profound implications for the cryptocurrency's supply and price dynamics.

Bitcoin Supply Crunch on the Horizon

As the halving event draws near, the supply of Bitcoin held on global cryptocurrency exchanges has been dwindling rapidly. Bybit estimates that approximately nine months' worth of BTC remains on exchanges, highlighting a potential supply crunch.

This scarcity is further exacerbated by the constant influx of funds into Spot Bitcoin ETFs, which is currently estimated at $500 million daily. This translates to an outflow of approximately 7,142 BTC per day from exchanges, suggesting that all remaining BTC reserves on exchanges could be depleted within nine months.

Halving Event to Intensify Supply Squeeze

The upcoming halving event is a significant factor contributing to this supply crunch. This event, scheduled for late April, will reduce the issuance rate of new Bitcoin by 50%, effectively cutting miner rewards in half.

Bybit predicts a significant reduction in the sell-side supply of BTC flowing into Centralized Exchanges (CEXs) following the halving event. This will further amplify the supply squeeze and potentially drive Bitcoin prices upward.

Bitcoin: Twice as Rare as Gold

Bybit's report draws comparisons between Bitcoin's supply post-halving and that of gold. The exchange emphasizes Bitcoin's growing stature as a safe haven asset, particularly among seasoned investors.

The halving event is expected to enhance Bitcoin's scarcity significantly, making it an even rarer asset than gold. Bybit's analysis, based on the Stock-to-Flow (S2F) ratio, indicates that Bitcoin's S2F ratio will surge to 112 post-halving, surpassing gold's current ratio of 60.

"Each Bitcoin halving strengthens the narrative of Bitcoin as not just a currency but a scarce digital asset, akin to digital gold," stated Ben Zhou, Co-founder and CEO of Bybit. "This upcoming halving will propel BTC into an era of unprecedented scarcity, making it twice as rare as gold."

Post-Halving Price Surge Anticipated

The report highlights the strong correlation between Bitcoin's supply squeeze and its price movements. Analysts predict a notable upward price pressure on Bitcoin in the wake of the halving event.

While the magnitude of the price surge is expected to be less pronounced than the pre-halving bull run, it is anticipated that BTC's price could reach new all-time highs.

Conclusion

Bybit's report provides a comprehensive assessment of the upcoming Bitcoin halving event and its profound impact on the cryptocurrency's supply and price dynamics. The report concludes that the halving event will create an unprecedented level of scarcity, further enhancing Bitcoin's status as a safe haven asset and potentially driving its price to new heights.