Bitcoin is on the verge of a supply shock that may lead to notable price increases, according to Katalin Tischhauser, head of research at digital asset banking group Sygnum. She explained that a large demand for Bitcoin could create a substantial multiplier effect, where each dollar of demand could potentially lead to an increase in market capitalization by $20 to $30. This multiplier effect has already been evidenced following key events like the Bitcoin spot ETF launches and the US elections.
The constrained liquid supply of Bitcoin, which has been decreasing steadily over the past 1.5 years, is considered a significant contributing factor to the anticipated price surge. Tischhauser pointed out that this shrinking supply is influenced by a growing number of Bitcoin investment vehicles.
Moreover, she highlighted structural elements such as increased regulatory clarity and macroeconomic forces that enhance Bitcoin's attractiveness as a deflationary asset. Bitcoin exchange-traded funds (ETFs) have experienced only four days of outflows since mid-April, suggesting sustained interest in the asset.
Nick Forster, founder of Derive, mentioned that Bitcoin is likely to encounter a consolidation phase, described by him as a 'healthy pause.' This pause is seen as necessary for the market to absorb recent gains and prepare for the next upward movement. While some analysts anticipate much higher price targets for Bitcoin, ranging between $200,000 and $300,000, the short-term outlook suggests that traders should stay informed and prepared for potential volatility.
The constrained liquid supply of Bitcoin, which has been decreasing steadily over the past 1.5 years, is considered a significant contributing factor to the anticipated price surge. Tischhauser pointed out that this shrinking supply is influenced by a growing number of Bitcoin investment vehicles.
Moreover, she highlighted structural elements such as increased regulatory clarity and macroeconomic forces that enhance Bitcoin's attractiveness as a deflationary asset. Bitcoin exchange-traded funds (ETFs) have experienced only four days of outflows since mid-April, suggesting sustained interest in the asset.
Nick Forster, founder of Derive, mentioned that Bitcoin is likely to encounter a consolidation phase, described by him as a 'healthy pause.' This pause is seen as necessary for the market to absorb recent gains and prepare for the next upward movement. While some analysts anticipate much higher price targets for Bitcoin, ranging between $200,000 and $300,000, the short-term outlook suggests that traders should stay informed and prepared for potential volatility.
