According to a recent report from Bybit, a leading cryptocurrency exchange, the approaching Bitcoin halving could significantly reduce the amount of Bitcoin available for trading on exchanges over the next nine months. This reduction in supply is expected to result from the halving event, which will decrease Bitcoin’s issuance rate by half, making the digital currency even more sought-after than before.
Following the halving event, the number of newBitcoins entering circulation will decrease at an accelerated rate, according to the data. Should $500 million be invested daily in Bitcoin spot ETFs, all the approximately 2 million Bitcoins currently up for grabs on exchanges would be purchased within roughly nine months.
The limited supply of new Bitcoin entering the market after the halving will increase its scarcity, making it more rare than gold based on their Stock-to-Flow ratios. According to the report, this ratio is determined by dividing the current amount of a commodity in circulation by the annual production rate.
Before the expected Bitcoin halving in April 2024, its Stock-to-Flow (S2F) ratio is approximately 56, whereas gold’s S2F ratio is around 60. After the halving, analysts predict that Bitcoin’s S2F ratio will nearly double to around 112.
Institutional investors are actively gearing up for this occurrence, given the green light from the U.S. to trade Bitcoin Spot ETFs. They view Bitcoin as more than just a currency – it’s a prized digital asset whose value is influenced by the broader cryptocurrency market and carries lower risk compared to other virtual currencies.
Ben Zhou, the Co-Founder and CEO of Bybit, expressed that the approaching Bitcoin halving in 2024 would result in a period of unmatched scarcity for Bitcoin, making it even more rare than gold.
Ben stressed that every Bitcoin halving underscores the concept of Bitcoin as a limited digital treasure, akin to digital gold.
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2024-04-17 14:12