Cryptocurrency exchange and trading platform, Bybit, recently released a report discussing the upcoming Bitcoin halving event and its potential impacts on the supply dynamics of Bitcoin within exchanges in the crypto space. According to Bybit, the Bitcoin reserves within the world’s crypto exchanges have been depleting rapidly, with only nine months of BTC supply left on exchanges.
With just two million Bitcoin left in total supply, Bybit explains that a daily influx of $500 million into Spot Bitcoin ETFs would lead to approximately 7,142 BTC leaving exchanges daily. This depletion of reserves suggests that it would take only nine months to exhaust all remaining BTC reserves on exchanges. Bybit attributes this supply squeeze to the upcoming Bitcoin halving event, which will reduce the cryptocurrency’s total supply by 50% by cutting Bitcoin miners’ rewards in half.
After the halving event, Bybit predicts that the sell-side supply of BTC flowing into Centralized Exchanges (CEXs) will significantly decrease. This reduction in supply is expected to exacerbate Bitcoin’s scarcity, making the supply squeeze even more pronounced.
In its report, Bybit draws a comparison between Bitcoin’s supply dynamics post-halving and that of gold. The crypto exchange posits that Bitcoin is gradually evolving into one of the safest investment options, even for seasoned investors in the crypto space. Bybit suggests that the Bitcoin halving event will substantially impact the cryptocurrency’s scarcity factor, positioning it as an even rarer asset than gold.
Bybit’s analysis of the Stock-to-Flow (S2F) ratio reveals that Bitcoin’s current S2F ratio is approximately 56, whereas gold’s ratio is 60. Following the halving event in April, Bitcoin’s S2F ratio is projected to double to 112. Bybit emphasizes that each Bitcoin halving event reinforces the narrative of Bitcoin as a scarce digital asset, comparable to digital gold.
Ben Zhou, the Co-founder and CEO of Bybit, expressed his views on Bitcoin’s rarity post-halving, stating that the upcoming event in 2024 will elevate BTC into an era of unparalleled scarcity, making it twice as rare as gold. This perspective underscores the growing importance of Bitcoin as a valuable investment asset.
Additionally, the report from Bybit suggests that Bitcoin’s price is likely to experience significant upward pressure following the halving event. The supply squeeze resulting from the halving could potentially drive Bitcoin’s price to new highs during this period.
While several crypto analysts anticipate a post-halving increase in Bitcoin’s price, they believe that the surge may be less dramatic than the pre-halving rally, which saw Bitcoin reaching new all-time highs of over $73,000. As the price of Bitcoin hovers below $63,000, the market continues to speculate on the potential impact of the halving event on Bitcoin’s price trajectory.
Bybit’s analysis sheds light on the implications of the Bitcoin halving event on the supply dynamics of the cryptocurrency. With a keen focus on scarcity, price dynamics, and market predictions, Bybit’s insights offer valuable perspectives on the evolving landscape of Bitcoin in the crypto space. As investors navigate the uncertainties surrounding the halving event, conducting thorough research and exercising caution in investment decisions remain paramount.
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