Bitcoin at $88K driven by post-halving supply shock
Bitcoin's (CRYPTO:BTC) recent surge to $88,975 is being attributed primarily to a post-halving supply shock rather than political factors, according to experts.
Onramp Bitcoin co-founder Jesse Myers emphasised that while the incoming pro-Bitcoin administration in the United States has played a role, it is not the main driver.
“If you’re wondering what’s happening with #Bitcoin… Yes, the incoming Bitcoin-friendly administration has provided a recent catalyst… But, that’s not the main story here,” Myers stated on November 11.
The main factor behind this price movement is the impact of Bitcoin's halving in April, which reduced block rewards from 6.25 BTC to 3.125 BTC.
Myers explained that this reduction has led to a notable supply shock.
“There’s not enough supply available at current prices to satisfy demand,” he noted, stressing that supply-demand equilibrium must be reached, pushing prices higher.
The entry of Bitcoin exchange-traded funds (ETFs) has further amplified demand.
On November 11 alone, US Bitcoin ETFs reported inflows of approximately 13,940 BTC, starkly contrasted with just 450 BTC mined that day.
Myers highlighted the cyclical nature of post-halving periods, referencing past bubbles in 2012, 2016, and 2020.
“A post-halving bubble is the result,” he said, predicting a similar pattern this cycle, with prices poised to climb further.
Supporting this view, on-chain analyst James Check pointed out that Bitcoin’s $1.6 trillion market cap is dwarfed by gold, which has seen $6 trillion added over the past year.
Despite this, Bitcoin’s finite supply and experienced holders set the stage for continued growth.
Additionally, financier Anthony Scaramucci suggested that institutional investments and the establishment of strategic Bitcoin reserves by the US and other countries are likely, adding, “It may feel like you missed it, but you didn’t. It’s early.”
With 94% of all Bitcoin already in circulation or lost, only around 1.2 million BTC remain to be mined, intensifying the supply-demand dynamic.
At the time of reporting, the Bitcoin price was $89,096.43.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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