The recent report released by cryptocurrency exchange Bybit sheds light on the upcoming Bitcoin halving event and its potential impacts on the supply dynamics of Bitcoin within exchanges in the crypto space. According to Bybit, the reserves of Bitcoin on exchanges have been depleting rapidly, with only nine months of BTC supply left on exchanges. With just two million Bitcoin remaining in total supply, a daily influx of $500 million into Spot Bitcoin ETFs could result in approximately 7,142 BTC leaving exchanges daily. This depletion of reserves suggests that it would take only nine months to exhaust all remaining BTC reserves on exchanges.
Bybit has identified the upcoming Bitcoin halving event as a significant contributor to the supply dynamics of Bitcoin. The event, which will decrease the cryptocurrency’s total supply by 50% by halving Bitcoin miners’ rewards, is expected to have a profound impact on the sell-side supply of BTC flowing into Centralized Exchanges (CEXs). Additionally, Bybit predicts that the supply squeeze of Bitcoin after the halving event will be exacerbated.
In its report, Bybit compares Bitcoin’s supply dynamics post-halving with that of gold. The exchange reveals that Bitcoin is becoming an increasingly attractive investment option, even for experienced investors in the crypto space. Bybit predicts that the halving event will significantly enhance Bitcoin’s scarcity factor, making it a rarer asset than gold. Based on the Stock-to-Flow (S2F) ratio, Bybit discloses that Bitcoin’s current S2F ratio is around 56, while gold’s ratio is 60. After the halving event, Bitcoin’s S2F ratio is projected to double to 112.
Bybit’s Co-founder and CEO, Ben Zhou, emphasizes the narrative of Bitcoin as a scarce digital asset, likening it to digital gold. He anticipates that the upcoming halving event in 2024 will propel BTC into a new era of unprecedented scarcity, making it twice as rare as gold. Moreover, a report suggests that the price of Bitcoin could experience significant upward pressure following the halving event, potentially driving its price to new heights. However, some analysts believe that the post-halving price increase may be less dramatic than the pre-halving surge that saw Bitcoin reaching all-time highs of over $73,000.
The impact of the Bitcoin halving event on the supply dynamics of the cryptocurrency is expected to be substantial. Bybit’s report highlights the depletion of Bitcoin reserves on exchanges, the contribution of the halving event to the supply squeeze, and Bitcoin’s increasing scarcity compared to gold. The potential price movements post-halving are also anticipated, with the price of Bitcoin potentially reaching new heights. It is essential for investors to conduct thorough research and due diligence before making any investment decisions in the volatile cryptocurrency market.