Demand for Bitcoins will exceed new supply in 8 years

Investors are demanding Bitcoin, and if demand remains the same, it could cause a supply shock after the next two bitcoin halvings.

Demand for Bitcoins will exceed supply after the second halving

A research report from the ZUBR cryptocurrency exchange says: Buyers’ demand will exceed the daily supply of mined Bitcoins.

ZUBR processed the numbers provided by Chainchysis, a blockchain analysis company. The purpose was to predict what the market demand for bitcoin might look like over the next eight years. According to the company, if daily bitcoin production falls to 450 BTC per day after halving in 2024 (currently at 900 BTC per day), then “retail investors could potentially absorb more than 50%” of this daily supply.

Bitcoin halving takes place every four years – it is built into the BTC code. In principle, it halves the profit from mining, thereby reducing the daily extracted Bitcoin reserves and keeping inflation under control.

The report shows that small investors are accumulating Bitcoin. However, Coin Metrics found out the same thing in April this year.

ZUBR supports this statement with additional data from Chainalysis, which shows the number of addresses holding a rounded amount of bitcoin between 1 and 10 BTC. Addresses in this category have had only five negative months of growth since 2011; every other month, the number of addresses holding this amount has increased, and this year alone has increased by 11%.

Small Bitcoin investors buy after the fall when institutional traders flee

According to the report, the total value of these addresses reached a cumulative $ 5 billion in June this year. If this demand continues and continues to grow, then it will exceed the amount of bitcoin mined per day by 2028.

If we want to find out what effect this may have on the BTC supply network and its price, we do not have to look far.

The gold market experienced a shortage of supply and delays in transport following the impact of the economic tsunami caused by COVID-19. This resulted in a huge gap between buying and selling premium ($ 0.50 per purchase and $ 50 per sale in some markets). This also led to short-term futures prices exceeding the spot gold market.

Bitcoin is not so limited in supply because it is delivered electronically. But a supply shock should theoretically raise prices. This is mainly due to a specialized base of investors, the so-called “last resort rescuers”, who created the basic principle of bitcoin demand, regardless of price.

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