The Bitcoin Halving and its Impact on Demand/Supply Dynamics
The Bitcoin (BTC) price has been facing selling pressure lately, but the upcoming Bitcoin halving is expected to change the demand/supply dynamics in favor of BTC. Renowned crypto analyst Willy Woo highlights the significant gap between new investor demand and fresh supply in the Bitcoin network. Currently, the network sees approximately $607 million per day in new investor demand, compared to just $46 million per day in new supply from mined coins.
With the Bitcoin halving approaching in 60 days, this event holds great importance. Woo calculates new demand by analyzing changes in realized capitalization, representing the cumulative price investors paid for their BTC holdings. However, it’s important to note that this method may underestimate true demand as it doesn’t account for off-chain buy/sell activities.
BTC Price Expectations Post-Halving
As the Bitcoin supply decreases and demand continues to rise, it is likely to act as an upward catalyst for BTC. MacronautBTC presents an interesting analysis of how the BTC price could potentially increase by 5x from current levels, based on a conservative basis.
MacronautBTC’s analysis focuses on the aftermath of the halving event and envisions a scenario where daily demand for Bitcoin surpasses daily new supply by $23 million. Extrapolating this imbalance over 250 trading days in a year, MacronautBTC projects an additional market capitalization of $1.46 trillion.
According to MacronautBTC’s calculations, each $1 trillion increase in market capitalization corresponds to a $50,000 surge in Bitcoin’s price. Applying this metric, the projected additional market capitalization of $1.46 trillion could potentially drive Bitcoin’s price to reach $123,000.
Additionally, MacronautBTC suggests a conservative “multiplier” approach proposed by analyst Willy Woo, indicating a potential threefold increase in Bitcoin’s value relative to USD inflow. Combining this multiplier with the projected additional market capitalization, MacronautBTC envisions a total market capitalization of $5.38 trillion within a year, translating to a Bitcoin price surge to $273,000.
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