Bitcoin price is set to explode as supply shock grows
As Bitcoin’s popularity continues to rise, analysts are predicting a potential supply shock due to the decreasing availability of Bitcoin on exchanges. With a lower supply of Bitcoin and increasing demand, the price of the cryptocurrency is expected to skyrocket.
Overview of the US market and Bitcoin
According to CryptoRUS’ George Tung, the US market remains volatile due to conflicting reports on the Fed’s stance and varying opinions from Wall Street investors.
Despite this, Bitcoin’s value has remained strong and continues to outperform technology stocks and Chinese stocks.
Tung points out that the long-term potential of Bitcoin is undeniable and will always dominate the market due to its consistent growth over the past five to ten years.
Year of Price Divergence for Crypto
Bank of America predicts that 2023 will be the year of price divergence for crypto, meaning that the different categories or niches of cryptocurrencies will become more apparent.
Bitcoin’s dominance in the market will continue to affect the value of other cryptocurrencies in their respective categories, including utility coins, payment coins and stablecoins.
Bitcoin supply on exchanges
George Tung highlights the diminishing availability of Bitcoin on exchanges, hitting a five-year low. While this could be taken as bullish, it could also indicate a potential supply shock in the future.
As demand for Bitcoin continues to rise, the cryptocurrency’s scarcity on exchanges can drive up its price, creating an imbalance between supply and demand.
Companies that hold Bitcoin
Many companies hold large amounts of Bitcoin, further reducing its availability. For example, Block has $130 million in Bitcoin, while Galaxy Digital has $40,000.
Tesla has over 10,000, and Grayscale Trust has 640,000 Bitcoins, among other entities. This number is expected to increase as more companies invest in Bitcoin.
Implications of supply shocks
A supply shock could have significant implications for Bitcoin’s price and the cryptocurrency market. As Bitcoin’s scarcity on exchanges increases, demand is expected to increase.
This could lead to a massive increase in Bitcoin’s price, potentially breaking its previous high and reaching new levels of value.
The implications of this could have a significant impact on the overall cryptocurrency market, as Bitcoin’s value often affects the value of other cryptocurrencies.
Bitcoin’s Basics
Bitcoin’s fundamentals are also solid, with the Lightning Network hitting an all-time high for liquidity and the hash rate continuing to rise.
Bitcoin is also following similar fractal patterns to its previous breakout in 2018-2020. The Lightning network has become a critical payment network, and Bitcoin’s growing use worldwide is expected to further increase demand.
