30s Summary

The recent surge in Bitcoin prices is attributed not to the US election outcome, but to a decrease in Bitcoin supply following its last ‘halving’. Jesse Myers of Onramp Bitcoin highlights the ‘supply shock’ occurring six months after Bitcoin rewards were halved. With insufficient Bitcoin to meet demand at current prices, prices are forced to rise, creating a regular four-year ‘bubble’ cycle. Comparatively, Bitcoin’s market cap is lower than gold’s despite its scarcity. Analysts predict that with 94% of all Bitcoin either circulated or lost, prices will continue to soar as Bitcoin becomes rarer.

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Donald Trump’s win in the US election isn’t really the main brouhaha behind Bitcoin’s recent upwards climb. Instead, the reason’s more about the decrease in Bitcoin supply since it last halved. So if you’re scratching your head about this whole Bitcoin saga, here’s the real deal.

An analyst from Onramp Bitcoin, Jesse Myers, dismissed the idea that it was all about the new administration’s Bitcoin-friendly policies. He instead pointed to a supply shock that came six months after Bitcoin rewards were cut down by half, a process known as ‘halving.’ The halving in April made the already tough task of solving Bitcoin blocks even tougher, with less rewards.

Because of this, Myers argues there’s a supply shock brewing – there isn’t enough Bitcoin to go round at the current prices to sate everyone’s hunger for Bitcoin. That means prices have to rise to level out the demand and supply. It might sound bonkers, but this “bubble” that leads to rapidly increasing prices, is actually part of Bitcoin’s cycle and it happens every four years.

To put it in context, Myers shared that there’s no other kind of asset where new supplies are sliced by half every four years. The aftermath of such a halving? A price bubble, just like the ones we’ve seen in 2012, 2016, 2020, and now. He also hinted that prices are set to soar even higher!

Another analyst, James Check, gave a thumbs up to this idea. He compared Bitcoin’s market cap with gold’s, which grew by $6 trillion in the last year, even with a steady stream of recycled and new gold supplies. In contrast, Bitcoin’s market cap is ‘just’ $1.6 trillion, plus it’s even scarcer with die-hard holders. His prognosis? Bitcoin price will skyrocket.

On another note, financier Anthony Scaramucci encouraged those yet to invest in Bitcoin that it’s not too late. He also predicted that the US will invest in a large Bitcoin reserve and other countries and institutions will follow suit. Considering that a whopping 94% of all Bitcoin is already out in the wild or lost forever, only about 1.2 million Bitcoin are left to be mined. This will make Bitcoin even rarer, and most likely, more valuable.