Prediction of a Severe Bitcoin Sell-Side Liquidity Crisis
Ki Young Ju, the founder of CryptoQuant, a crypto analytics platform, predicts a severe Bitcoin “sell-side liquidity crisis” in the next six months. In this event, the founder thinks that not only will prices erupt to new levels, surpassing expectations, but the crisis will likely lead to a market disruption.
Bitcoin Records New All-Time Highs
Bitcoin is trading at around new all-time highs following sharp price gains on March 11. The coin roared to print new all-time highs of $72,800 before cooling off to spot levels. So far, analysts have linked the current upswing in Bitcoin to institutional demand.
Institutions Taking Away More Coins from Circulation
Last week, Ju observed a net inflow of over 30,000 BTC. This means that institutions are taking away more coins from circulation at an unprecedented level, contributing to scarcity. Institutions and wealthy individuals can gain exposure to BTC through spot ETFs without necessarily owning it directly.
Limited Number of Coins Held Across Centralized Exchanges and Miners
Beyond this, the concern lies in the limited number of coins held across centralized exchanges and known entities, especially miners. The founder estimates that exchanges and miners own roughly 3 million BTC. Ju explains in the post that entities in the United States hold 1.5 million BTC.
BTC Scarcity Crisis Expected
The founder notes that rising demand from spot ETFs and a constrained supply will create a “sell-side liquidity crisis” within six months. This scenario could lead to a situation where there aren’t enough sellers to meet the high buyer demand, further lifting prices to fresh levels.
Miner Rewards Slashed in April
The Bitcoin network will slash miner rewards by half in April from the current 6.125 BTC. Because of this, BTC’s emissions will drop, meaning only small amounts of coins will be released into circulation, further worsening the situation.
Potential Market Disruption and Benefits for Coin Holders
As such, if the current level of demand remains and institutions continue to double down, the expected scarcity crisis may likely cause a major disruption in the market, benefiting coin holders.
🔥Hot Take: A Severe Sell-Side Liquidity Crisis Could Be on the Horizon🔥
Ki Young Ju, founder of CryptoQuant, has made a bold prediction regarding Bitcoin’s future. He believes that within the next six months, there will be a severe sell-side liquidity crisis that could lead to a major market disruption. This crisis is expected to result from rising demand from spot ETFs and a constrained supply of BTC. With institutions taking away more coins from circulation and limited holdings across centralized exchanges and miners, there may not be enough sellers to meet the high buyer demand.
This prediction comes at a time when Bitcoin is already recording new all-time highs and analysts attribute this surge to institutional demand. The recent net inflow of over 30,000 BTC suggests that institutions are increasingly interested in acquiring Bitcoin. Furthermore, with the upcoming halving of miner rewards in April, the supply of BTC entering circulation will be further reduced.
If this sell-side liquidity crisis does occur as predicted by Ki Young Ju, it could lead to prices skyrocketing even further and potentially causing a major disruption in the market. Coin holders would likely benefit from this situation as scarcity increases demand and drives up prices.
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