A Bullish Outlook on Bitcoin’s Mining Event
A crypto analyst is optimistic about the future of Bitcoin (BTC), stating that the upcoming miner rewards halving event will have a significant impact on the market. This event, which occurs approximately every four years, will reduce the number of new coins entering the market and potentially make BTC deflationary.
Currently, the Bitcoin network distributes 6.25 BTC every 10 minutes, resulting in 900 BTC being mined daily. However, after the halving event, this number will be reduced to 450 BTC.
This reduction in supply is expected to create a supply shock, especially considering recent developments such as the approval of spot Bitcoin exchange-traded funds (ETFs) by the United States Securities and Exchange Commission (SEC).
Increase in Spot Bitcoin ETF Holdings
Since their launch in January, spot Bitcoin ETF issuers have accumulated over 160,000 BTC. The rate at which these ETFs are acquiring Bitcoin is crucial. If the current daily inflow of 5,800 BTC continues, it could surpass newly mined coins after the halving event.
This accumulation of Bitcoin by ETF issuers is expected to create a “supply shock of all supply shocks,” where demand outweighs available supply and drives up the price.
Furthermore, coins held by spot Bitcoin ETF issuers like BlackRock and Fidelity are catching up with those held by MicroStrategy. Data from Bitcoin Treasuries shows that MicroStrategy controls 190,000 BTC, while spot Bitcoin ETF issuers now hold over 659,401 BTC as of February 6.
Hot Take: Increased Demand and Reduced Supply to Boost Bitcoin Prices
The upcoming miner rewards halving event combined with the accumulation of Bitcoin by spot Bitcoin ETF issuers is expected to create a supply-demand dynamic that could drive up the price of Bitcoin. With the reduction in supply and the growing demand for BTC, the market may experience a significant increase in prices.
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