The recent surge in Bitcoin prices has drawn the attention of experts and analysts. While Donald Trump's election as US President brought positive changes to the Bitcoin community, the halving had the most significant impact.
Supply Shock After Halving
The Bitcoin halving in April reduced block rewards from 6.25 BTC to 3.125 BTC, making new blocks harder to solve and rewards smaller. Jesse Myers, co-founder of Onramp Bitcoin, emphasized that the main story is the ongoing process six months after the halving. The reduced supply indicates a market shortage, potentially leading to price increases and bubbles. Onchain analyst James Check noted that gold added about $6 trillion to its market value over the past year, while Bitcoin's market cap is only $1.6 trillion.
Increased Demand for Bitcoin
Anthony Scaramucci reassured those who have not invested in Bitcoin yet, saying they are still early in the process. The US is expected to establish a strategic Bitcoin reserve, with other countries likely to follow. Currently, about 94% of existing Bitcoin is in circulation or lost, meaning only about 1.2 million BTC could be added to the circulating supply.
Investors' Prospects and Expectations
Historically, each Bitcoin halving has resulted in price surges and bubbles. This cycle makes Bitcoin a unique investment vehicle with expectations for further future increases. Bitcoin investors anticipate continued price growth due to the supply shock. The interplay of decreasing supply and increasing demand raises Bitcoin's value, and interest from institutional investors and governments is also rising, bolstering Bitcoin's long-term sustainability.
The current dynamics surrounding Bitcoin suggest that the combination of reduced supply and increased demand creates conditions for its sustainable price growth in the future. Government and major investor interest only adds confidence to its long-term potential.
