Bitcoin Surge Driven by Supply Dynamics, Not Trump Victory, Analysts Say
In an unexpected twist, analysts are suggesting that Donald Trump’s recent election victory may not be the primary catalyst behind Bitcoin’s impressive rise, which has captivated crypto enthusiasts and investors alike. Instead, market specialists point to a significant post-halving supply shock as the real driver of Bitcoin’s price momentum.
On November 11, Jesse Myers, co-founder of Onramp Bitcoin, addressed the crypto community on social media platform X, stating, “If you’re wondering what’s happening with #Bitcoin… the incoming Bitcoin-friendly administration has provided a recent catalyst… But, that’s not the main story here.” He emphasized that the timeline of Bitcoin’s supply dynamics is crucial, noting, “We are 6+ months post-halving.”
The Bitcoin halving, which occurred in April, slashed block rewards from 6.25 BTC to 3.125 BTC, making each subsequent block more challenging to mine while reducing the reward. This event is critical in understanding market trends, as it leads to a decrease in new supply entering the market. Myers articulated that a “supply shock” has ensued, with current demand outstripping available supply at existing price levels.
The demand curve has been further intensified by the introduction of Bitcoin exchange-traded funds (ETFs) early this year. On November 11, US Bitcoin ETFs experienced significant inflows, purchasing approximately 13,940 BTC in just one day—far exceeding the 450 BTC mined. Myers predicts, "The only way to do that is for the price to go higher," which could ignite a cycle of increased investment interest manifesting in a bubble-like environment.
This cyclical phenomenon is not new; analogous price surges followed previous halvings in 2012, 2016, and 2020. Myers suggested that the nature of Bitcoin, wherein new supply is halved every four years, inherently creates a pattern leading to price spikes. This perspective echoes a sentiment shared by on-chain analyst James Check, who compared Bitcoin’s market cap with that of gold, emphasizing Bitcoin’s scarcity. "Bitcoin is just $1.6 trillion in market cap and is absolutely scarce," he stated. As the supply diminishes, and with 94% of the Bitcoin already in circulation or lost, the potential for price escalation remains high.
The current scenario echoes principles highlighted in biblical teachings, reminding us of the importance of stewardship, patience, and foresight. As Jesus taught in Luke 14:28, “For which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it?” This verse encourages careful consideration and preparedness, principles that resonate in the volatile world of investments.
Anthony Scaramucci, an American financier, echoed this forward-looking perspective, assuring those hesitant about Bitcoin’s viability that it’s still early for potential investors. He expressed confidence that the U.S. may soon establish a strategic Bitcoin reserve—a move likely to inspire other nations and institutional entities.
In conclusion, while the election of a Bitcoin-friendly administration may provide context, it is the intricacies of supply and demand that appear to hold the key to Bitcoin’s current upswing. As investors navigate these turbulent waters, it is beneficial to reflect on the broader spiritual lesson here: the importance of being proactive and prepared, balancing worldly investments with thoughtful stewardship.
In a world where uncertainties abound, let us remember the wisdom from Proverbs 21:5, “The plans of the diligent lead surely to abundance.” It invites us to remain diligent, wise, and hopeful as we engage with the ever-evolving economic landscape.
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