Bybit, a cryptocurrency exchange and trading platform, recently published a report highlighting the effects of the upcoming Bitcoin halving event on the supply dynamics of Bitcoin within exchanges. The report provides valuable insights into how the halving event could increase scarcity and impact the price of BTC in the crypto market.
According to Bybit’s report, the reserves of Bitcoin on major crypto exchanges around the world are depleting rapidly. The report suggests that there are only nine months’ worth of BTC supply left on exchanges, with approximately two million Bitcoins remaining in total supply. This data indicates that a daily inflow of $500 million into Spot Bitcoin ETFs could result in around 7,142 BTC leaving exchanges every day. At this pace, it would take just nine months to exhaust all remaining BTC reserves on exchanges.
Bybit attributes a significant portion of this supply squeeze to the upcoming Bitcoin halving event, which will cut Bitcoin miners’ rewards in half and reduce the cryptocurrency’s total supply by 50%. The report predicts that after the halving event, the supply of BTC flowing into Centralized Exchanges (CEXs) will decrease significantly, exacerbating the supply squeeze.
In its analysis, Bybit compares Bitcoin’s supply dynamics post-halving with that of gold. The report suggests that Bitcoin is becoming a preferred investment choice, even for seasoned investors in the crypto space. The halving event is expected to increase Bitcoin’s scarcity factor, making it even rarer than gold. Bybit uses the Stock-to-Flow (S2F) ratio to support this claim, stating that Bitcoin’s current S2F ratio is around 56, compared to gold’s ratio of 60. After the halving event, Bitcoin’s S2F ratio is projected to double to 112.
Bybit’s report also implies that Bitcoin’s price could experience significant upward pressure following the halving event, as a result of the increased scarcity. Analysts predict that the price surge post-halving may not be as dramatic as the pre-halving rally that drove Bitcoin to new all-time highs of over $73,000. However, the report suggests that the supply squeeze could still push the price of BTC to new heights during this period.
Bybit’s report sheds light on the impact of the Bitcoin halving event on the supply dynamics of Bitcoin in the crypto space. The impending halving is expected to enhance scarcity, reduce supply flowing into exchanges, and elevate Bitcoin to the status of a rare digital asset. Investors are advised to conduct their research and consider the risks associated with investing in cryptocurrencies, especially in volatile market conditions.
