Bitcoin Surge: Analyst Says Halving Supply Shock Outweighs Trump’s Election Victory!

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Bitcoin’s recent surge has grabbed headlines, but analysts insist that the primary driver isn’t the U.S. election results. Sure, Donald Trump’s victory may have sparked excitement about a crypto-friendly administration, but experts argue the real story lies in Bitcoin’s unique post-halving supply shock.

Jesse Myers, co-founder of Onramp Bitcoin, posted on X (formerly Twitter), “Yes, the new administration provided some momentum, but the real catalyst is something else entirely. What truly matters is that we’re six months past the halving.”

The Halving Supply Shock Hits Bitcoin

Bitcoin’s halving, which reduced block rewards from 6.25 BTC to 3.125 BTC, slashed the rate of new Bitcoin issuance in half. Myers highlighted how this supply reduction creates a “supply shock,” effectively curbing the availability of Bitcoin at current price levels.

Add to this the rising demand for Bitcoin ETFs, and you’ve got a perfect recipe for a price rally. On November 11, the U.S. Bitcoin ETF market recorded an inflow of approximately 13,940 BTC in a single day—compared to the daily mining output of just 450 BTC.

Myers summed it up succinctly: “The only way to balance this disparity is through a price increase.” He emphasized Bitcoin’s predictable four-year halving cycles as a key factor in driving market booms, pointing out similar spikes after the 2012, 2016, and 2020 halvings.

Bitcoin vs. Gold: The Supply Game

On-chain analyst James Check weighed in, noting Bitcoin’s $1.6 trillion market cap and comparing it to gold, which added over $6 trillion to its market cap over the past year despite its increasing supply. Check pointed out that Bitcoin’s absolute scarcity and its ability to endure volatility make it a unique asset. As demand rises, he predicted Bitcoin’s scarcity would push prices even higher.

Meanwhile, U.S. financier Anthony Scaramucci expressed confidence in Bitcoin’s future, speculating that the U.S. might consider a strategic Bitcoin reserve. Reassuring investors, he stated that it’s “not too late” to jump into Bitcoin for long-term gains.

Btw, gold added $6T to its market cap over the last 12 months, and has hundreds of billions of new and recycled supply coming to market.#Bitcoin is 1.6T, and absolutely scarce, with holders who have been through hell…many times.

Higher.

— _Checkmate 🟠🔑⚡☢️🛢️ (@_Checkmatey_) November 11, 2024

Approximately 94% of all Bitcoin has already been mined or lost, leaving only around 1.2 million BTC available for mining.

This limited supply intensifies competition among buyers and acts as a driving force for price increases, especially following halving events. Analysts believe this unique economic structure guarantees Bitcoin’s bullish trend and expect further growth as adoption by governments and institutions continues to rise globally.

MicroStrategy Buys More BTC

Michael Saylor’s MicroStrategy has solidified its position as the largest corporate holder of Bitcoin by purchasing an additional 27,200 BTC.

Reports reveal that this acquisition occurred between October 31 and November 10, 2024, at an average price of $74,463 per Bitcoin, including fees. The total purchase amounted to a staggering $2.03 billion.

With this latest acquisition, MicroStrategy now holds a total of 279,420 BTC, having invested a total of $11.9 billion. The average purchase price across all its acquisitions is $42,692 per Bitcoin—nearly half of the current Bitcoin price of $81,700.

Record Inflows into Crypto Investment Products

In a positive turn for the market, crypto investment products recorded high inflows of $1.98 billion last week, marking the fifth consecutive week of positive flows.

According to the latest CoinShares report, these inflows have pushed the total for the year to an all-time high of $31.3 billion. Additionally, global assets under management reached a record high of $116 billion, highlighting the growing institutional interest in cryptocurrency.

Conclusion

Whether it’s halving supply shocks, Trump’s election win, or growing institutional demand, Bitcoin continues to defy expectations. With its predictable cycles and unique scarcity, this digital gold is proving to be more than just a passing trend—it’s a financial revolution in the making.

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James Frost

I trade cryptocurrencies based on fundamentals, TA and indicators. It started as a hobby, then part time and currently full time for more than 2 years. This kind of trading and analysis is endless daily work. This means throwing all previous analyzes in the trash and starting day-to-day again.