Donald Trump’s election victory in the United States is not seen as the main reason for the recent price surge of Bitcoin. According to Jesse Myers, co-founder of Onramp Bitcoin, a Bitcoin-friendly administration contributed to this increase. However, the primary factor is the supply shock following the halving event.
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Halving and Supply Limitation
The halving that occurred in April reduced Bitcoin block rewards from 6.25 BTC to 3.125 BTC. This development made finding each new block more challenging, leading to fewer rewards. Jesse Myers emphasizes that as a result, a supply shock was experienced, and there was insufficient supply to meet the demand. He believes that the increase in price is the only way to restore this balance.
Myers states, “Price increases can only stabilize this supply and demand balance. This increase can turn into mania and a bubble, but that is how the market operates.”
Expert Opinions and Market Dynamics
On-chain analyst James Check compares Bitcoin’s market value to gold, noting that Bitcoin is durable and scarce. He predicts this will have a positive effect on the price. Noted financial figure Anthony Scaramucci also states that Bitcoin is still in its infancy and that institutional interest will continue to grow.
Experts indicate that 94% of the circulating Bitcoins are either actively used or lost, while around 1.2 million BTC can still be mined. However, the limited current supply creates upward pressure on demand. The upcoming halving event is also expected to lead to a similar price increase.
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Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should conduct their own research.
