$BTC supply crash: fairy tale, the untold story.
Updated
"Bitcoin price is set to skyrocket in the near future, claims an analyst on X. The analyst pointed out that the supply of BTC on exchanges has crashed."
There is this common misconception that because the number of Bitcoins held on exchanges is getting lower every passing day, this will create a supply crash and push Bitcoin to the moon!
Actually, if you scratch the surface, the opposite is likely to happen.
Historically, after the halving, the division by two of the number of Bitcoins mined has done exactly that. After a period of time, the demand exceeds the supply, creating a massive bull run.
But this cycle in 2024, everything is different.
Most people only see the superficial aspect: yes, there are fewer Bitcoins available for trading. But what they forget to mention is that in this cycle, a lot of the supply is held by governments and agencies, outside of the market.
Let's summarize the situation. As I am writing, there are 2.8M Bitcoins on the exchanges. However, outside the market:
- 210,000
BTC are held by the US government.
- 200,000BTC are held by Mt. Gox litigators.
- 136,295BTC are held by an unknown wallet.
- 285,105BTC are held by GBTC,
and many anonymous addresses who can sell at any time.
That means at least 700,000 BTC are held by institutions and government agencies and are about to be sold.
The big difference with this 2024 cycle is that:
- The ones who own these BTC do not care about the price. They are not traders but rather employees with obligations to sell when required.
- About 40% of the available supply is not in the market and therefore will have to be sold.
Today,BTC dropped 2%, with about 2,000 BTC sold on Binance. Imagine if one of these entities sold 10,000 BTC at once?
My point is that the normalBTC cycle is totally invalidated by this supply of BTC. Their sale will affect the price of BTC negatively, at least until the demand catches up. The sale of these BTC might create a panic sell from the ETF issuers, which would wreck the whole crypto space for a while.
Conclusion: the supply crunch will not happen. Instead, these institutions will increase the supply by selling their holdings on the market, negatively affecting the price of Bitcoin.
It is even possible that the bull market could be canceled if too many of theseBTC are sold, nullifying the halving effect and creating a never-before-seen early bear market.
There is this common misconception that because the number of Bitcoins held on exchanges is getting lower every passing day, this will create a supply crash and push Bitcoin to the moon!
Actually, if you scratch the surface, the opposite is likely to happen.
Historically, after the halving, the division by two of the number of Bitcoins mined has done exactly that. After a period of time, the demand exceeds the supply, creating a massive bull run.
But this cycle in 2024, everything is different.
Most people only see the superficial aspect: yes, there are fewer Bitcoins available for trading. But what they forget to mention is that in this cycle, a lot of the supply is held by governments and agencies, outside of the market.
Let's summarize the situation. As I am writing, there are 2.8M Bitcoins on the exchanges. However, outside the market:
- 210,000
BTC are held by the US government.- 200,000
BTC are held by Mt. Gox litigators.- 136,295
BTC are held by an unknown wallet.- 285,105
BTC are held by GBTC,and many anonymous addresses who can sell at any time.
That means at least 700,000 BTC are held by institutions and government agencies and are about to be sold.
The big difference with this 2024 cycle is that:
- The ones who own these BTC do not care about the price. They are not traders but rather employees with obligations to sell when required.
- About 40% of the available supply is not in the market and therefore will have to be sold.
Today,
BTC dropped 2%, with about 2,000 BTC sold on Binance. Imagine if one of these entities sold 10,000 BTC at once?My point is that the normal
BTC cycle is totally invalidated by this supply of BTC. Their sale will affect the price of BTC negatively, at least until the demand catches up. The sale of these BTC might create a panic sell from the ETF issuers, which would wreck the whole crypto space for a while.Conclusion: the supply crunch will not happen. Instead, these institutions will increase the supply by selling their holdings on the market, negatively affecting the price of Bitcoin.
It is even possible that the bull market could be canceled if too many of these
BTC are sold, nullifying the halving effect and creating a never-before-seen early bear market.Note
This idea again has been pretty accurate.I forgot Mt.Gox in my list with a hoping 190k BTC to sell.
After this is done, we will be ready for the real bull run.
Note
I told you.- Germans selling
- MT.Gox
- Gemini
etc...
No supply crash, rather a nice mini bear market.
Note
MT.Gox FUd finished. The weather is getting better, we can see the sun coming soon. Note
New FUD added to the list: US Government selling: they have 200.000 BTC +
However the 2x transfers to Coinbase seems to be for keeping these BTC save, not for selling them. Let'shope they do not sell.
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