This Bitcoin halving will be different from previous ones

Unlike previous cycles, this year marks a new era, fueled by growing institutional adoption and expanding use cases, painting an extremely bullish picture for Bitcoin.

Bitcoin in a parabolic bullish cycle

The approval and success of Bitcoin spot exchange-traded funds (ETFs) marked a historic milestone in the crypto journey. Indeed, since their creation, the price of BTC has experienced an impressive growth of 60%, with its trading volumes reaching unprecedented heights.

The influx of institutional interest in Bitcoin ETFs has attracted more than $30 billion in assets under management in two months. This explosion in demand also resulted in a record influx of $1 billion in a single day. At the same time, net flows exceed $10 billion and daily inflows have tripled the daily supply.

This scenario is set to intensify after the halving, with ETFs holding over 467,000 BTC, outside of Grayscale, which far exceeds Bitcoin's annualized supply of 164,000 BTC.

Thus, the current appetite for BTC has already absorbed around 4.5% of the accessible supply of this crypto asset. Therefore, growing adoption of Bitcoin ETFs could catalyze a tightening of its supply.

“With registered investment advisors overseeing approximately $114 trillion in the United States mandated to wait 90 days after new product launches before investing, a simple 1% allocation to Bitcoin could trigger substantial inflows, almost doubling its current market capitalization and causing a supply squeeze in the process,” write 21Shares analysts.

Read more: Bitcoin Down Cycles and Investment Strategies: What You Need to Know

Bitcoin ETF Holdings
Bitcoin ETF Securities. Source: CryptoQuant: CryptoQuant

The unwavering confidence of long-term Bitcoin holders, despite market volatility, also illustrates the strong belief in the value proposition of this digital coin. In fact, the supply held by these long-term investors represents approximately 70% of the total circulating supply of the asset.

In contrast, the supply held by holders of short-term securities increased by more than 33%, further limiting available supply and pointing to an imminent price surge.

According to analysts at 21Shares, the upcoming Bitcoin halving on April 25, 2024, in this context, suggests that the cryptocurrency market could be on the cusp of a unique and potentially unprecedented bull cycle. With ETFs attracting a new wave of traditional investments and the unwavering conviction of long- and short-term holders, Bitcoin's supply constraints are becoming more and more pronounced.

“If this trend persists, Bitcoin's supply will become increasingly illiquid, laying the groundwork for a supply squeeze and the potential start of a parabolic bull cycle,” conclude 21Shares analysts.

To find out more: Bitcoin Prediction 2024 / 2025 / 2030

Bitcoin Supply Held by Long-Term Holders
Supply of Bitcoin held by long-term holders. Source: Glassnode

Thus, while recognizing the volatility inherent in Bitcoin, the current environment seems poised for a significant upward trajectory as it approaches its halving of this year 2024. This cycle could then be different from previous ones and usher in a new era of adoption institutional and financial recognition of the crypto asset.

Moral of the story: Bitcoin, ready for a new transformation.


Disclaimer: In accordance with The Trust Project guidelines, BeInCrypto is committed to providing unbiased and transparent information. This article aims to provide accurate and relevant information. However, we encourage readers to verify the facts on their own and consult a professional before making a decision based on this content.

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