BTC supply crisis will appear soon

[MrSpasybo]

After the BTC Spot ETF was approved, BTC buying action from funds is what we have been waiting for, we finally have it.

“Blackrock’s spot bitcoin exchange-traded fund (ETF) has acquired 11,439 bitcoin, with a market value of nearly $500 million, within two days of trading on the Nasdaq stock exchange.”^[1]

11,439 BTC = 13-days BTC supply, quite a large number!
Of course, I believe that BlackRock is smart enough not to deposit $500M on Coinbase to collect BTC, they can buy through OTC to avoid price fluctuations. However, I also believe that OTC supply is not infinite, meaning there will come a time when BlackRock and other Spot ETF funds will need to look to CEXs to buy BTC for reserve purposes.

However, it seems the story is not so simple: the supply of BTC held on cryptocurrency exchanges has fallen to its lowest level in six years, according to data from Glassnode. This decline has raised concerns about the potential impact on market liquidity.

“The amount of Bitcoin [BTC] held on centralized cryptocurrency exchanges has dropped to its lowest level since December 2017, according to on-chain data obtained from CryptoQuant.
The leading coin’s exchange reserve peaked at 3.08 million on 2nd March 2022, after which it began to decline. As of this writing, 2.01 million BTC remain on exchanges, representing a 34% decrease in the last three years.”^[2]

Source: CryptoQuant^[2]

Regardless of the reasons for the decline (investors are taking their Bitcoin off exchanges and storing it in private wallets, or moving their Bitcoin to lending platforms in order to earn interest), it is clear that it is having an impact on market liquidity. When there is less BTC available on exchanges, it can be more difficult for traders to buy and sell BTC. BlackRock and Spot ETFs funds will also suffer the same fate: it is not easy to buy BTC at low prices!

Additionally, we have the BTC halving coming up in April^[3]. The supply of new BTC will be halved, meaning there will be less new BTC for investors and Spot ETFs funds to buy.

I firmly believe that with 3 impacts: increased demand, reduced available supply on CEXs and halved new supply, BTC price will soon explode and create a new ATH right in 2024. For me, the short-term BTC price fluctuations are not a concern, I believe we are in the first steps of the 2024 bullrun and BTC could reach at least $150K in 2025.

What do you think about these impacts on BTC price in the long term? Is this just a trick of Market Maker? How much do you expect BTC price to reach in 2024-2025?
[1] Blackrock’s Spot Bitcoin ETF Now Holds 11,439 BTC
[2] Bitcoin exchange supply hits six-year low – What caused the dip?
[3] Bitcoin halving countdown

[Nwada001]

I firmly believe that with 3 impacts: increased demand, reduced available supply on CEXs and halved new supply, BTC price will soon explode and create a new ATH right in 2024. For me, the short-term BTC price fluctuations are not a concern, I believe we are in the first steps of the 2024 bullrun and BTC could reach at least $150K in 2025.

I also believe this has a great impact on the bitcoin price, as it also follows the law of demand and supply.
 
One of the reasons why most people are withdrawing their coins from exchanges is as a result of their lack of faith in the exchange, and any coin that is deposited in an exchange technically does not belong to the owner again as they don't have access to the wallet. (#Not Your Key, Not Your Coin) So many people are withdrawing their funds as a result of wanting to have total control over their wallets—not just any kind of wallet but a self-custodial wallet.
 
And in respect of what I think of the price, anything is possible in bitcoin, but I don't see the price crossing above $100,000 in 2024 based on my own calculation. We are likely to see $100,000 to $200,000 in the next few years, which is between 2025 and 2026. The possibility of that happening is very high.

[tranthidung]

Long story short, because the bull market is in the air with Bitcoin halving in April 2024.

It's good time to read an old article from Willy Woo, aka. Woonomic.

Supply Shock, predicting price by quantifying intent to buy and sell. We actually can predict massive new capital inflow in 2024 and 2025 as it is like rhythm of history and we already saw it in three previous halvings and bull markets.

New (future) supply will be decreased because of two main factors: halving (block subsidy will halve); more lost bitcoin (because of private key loss).

Demand will increase with time, first of all, because of adoption and in 2024, we will have a big booster from Bitcoin Spot ETFs. Big capital from Wall Street will boost this market a lot.

[dwyane36]

I firmly believe that with 3 impacts: increased demand, reduced available supply on CEXs and halved new supply, BTC price will soon explode and create a new ATH right in 2024. For me, the short-term BTC price fluctuations are not a concern, I believe we are in the first steps of the 2024 bullrun and BTC could reach at least $150K in 2025.
~
What do you think about these impacts on BTC price in the long term? Is this just a trick of Market Maker? How much do you expect BTC price to reach in 2024-2025?

My expectations about the future BTC price are about the same. The long-awaited adoption of spot BTC-ETF and the upcoming BTC halving will probably be the decisive factors that will influence the BTC price and the entire crypto industry over the next few years. There is an assumption that BTC will be able to break the previous ATH this year, and we may see a peak as early as next year, i.e. the BTC price may well go above $100k or even $150k in 2025. Not sure about 2026.

[Yamane_Keto]

I have two important observations on the bitcoin exchange reverse chart. In 2021, the reserve decreased severely, and the price of Bitcoin reacted directly to this decrease, as after the decline continued for more than several months, the price began to interact and rise, while in 2023 this did not happen, and despite the decrease in the reserve, the price React much less, and the reason for this is that you only look at the supply side, not the demand.



If what happened in 2021 is repeated and ETFs continue to buy Bitcoin, a surrender will occur within 5 to 8 months. Then, if demand increases, the price will inevitably explode, and the ATH will be in Q1 2025. If that does not happen, the price will increase, and the ATH will be composed of two peaks.

[Fivestar4everMVP]

What do you think about these impacts on BTC price in the long term? Is this just a trick of Market Maker? How much do you expect BTC price to reach in 2024-2025?

I think you have said it all, in the long term, (which is not really a long term anymore since a new all time high will happen between this year and next year being 2025) the price of bitcoin will surely explode and would make mad gains for it's current holders.
One thing I believe is that, currently, market makers, and even the big names are quietly accumulating bitcoin, I would say that 2/3 of them are buying bitcoin over the counter so that the real price of bitcoin stays hidden from the general public until when the time is right to unveil it.

Many will possibly regret not buying bitcoin at this current price, as with my predictions, I've always said that the price of bitcoin will reach $120,000 and above in the next and coming bull run, and the coming bull run will probably be the best and biggest bull run for bitcoin and cryptocurrencies ever.

[mocacinno]

I have always advocated not keeping your funds on any (online) custodial wallet, including but not limited to exchanges. Offcourse, if you're an active trader, you might not have much choice, but if you're a holder, your funds should be in a wallet you (and you alone) fully controll.

It doesn't supprise me many people started holding their funds in a non-custodial wallet, after the many hacks, phishin and (exit)scams pulled by centralised exchanges in the past.

As for the dwindling supply on exchanges: i'm more of a technical guy, i don't really care for (market) economics, but i've always assumed that less supply + more demand = higher prices

[MrSpasybo]

I have two important observations on the bitcoin exchange reverse chart. In 2021, the reserve decreased severely, and the price of Bitcoin reacted directly to this decrease, as after the decline continued for more than several months, the price began to interact and rise, while in 2023 this did not happen, and despite the decrease in the reserve, the price React much less, and the reason for this is that you only look at the supply side, not the demand.

If what happened in 2021 is repeated and ETFs continue to buy Bitcoin, a surrender will occur within 5 to 8 months. Then, if demand increases, the price will inevitably explode, and the ATH will be in Q1 2025. If that does not happen, the price will increase, and the ATH will be composed of two peaks.

The crypto winter 2022-2023 is a bit different from previous crypto winters: BTC price decreased but the number of BTC on CEXs did not increase. Whether the reason is the fear from the FTX crash or the trend of self-custody and participation in DeFi services for BTC, the fact remains that the market behavior has changed, I hope this is positive for the crypto market maturity, not a trick/trap from Market Maker.

Back to the price prediction when the supply crisis/shock will come in the future: in my prediction, I expect that the cyclicality of BTC price will continue to repeat and we have a peak in November 2025, about 18-20 months after BTC halving. I cannot predict its specific trajectory, but the similarity of price movements in 2023 and 2015 gives me a hint: BTC price in 2024-2025 will increase steadily as in 2016-2017.

[Dr.Bitcoin_Strange]

If all the data and information as said is actually correct, then it's obvious that the price of Bitcoin will definitely reach an all-time high. Although throughout last year, there has been high speculation regarding the price of Bitcoin skyrocketing, which i also believe that the price of Bitcoin will surely explode like you said.

The fact is that, since 2021 up until date, I know that the rule of "Not your key, not your coin. " Have overly spread in the space, and investors are now putting off their holdings from CEX. Another thing that led to that is because of some exchange hacks and collapses that have happened around the same time, so people have more reasons not to trust CEX.

[Yamane_Keto]

As for the dwindling supply on exchanges: i'm more of a technical guy, i don't really care for (market) economics, but i've always assumed that less supply + more demand = higher prices

There may be another reason, which is that someone who buys in large quantities does not want to influence the market, so he buys from OTC, or he wants to influence the price, so he sells on the crypto exchange.
The supply of Bitcoin, especially on a crypto exchange, can be manipulated, but the more the value of Bitcoin increases, the more billions you need to make such a risk.

I have two important observations on the bitcoin exchange reverse chart. In 2021, the reserve decreased severely, and the price of Bitcoin reacted directly to this decrease, as after the decline continued for more than several months, the price began to interact and rise, while in 2023 this did not happen, and despite the decrease in the reserve, the price React much less, and the reason for this is that you only look at the supply side, not the demand.

The crypto winter 2022-2023 is a bit different from previous crypto winters: BTC price decreased but the number of BTC on CEXs did not increase. Whether the reason is the fear from the FTX crash or the trend of self-custody and participation in DeFi services for BTC, the fact remains that the market behavior has changed, I hope this is positive for the crypto market maturity, not a trick/trap from Market Maker.

The sale of bitcoins that LUNA had also had an impact, but I hold the reason that we did not see the price of $100,000 to the collapse of FTX. They caused severe damage to the rising wave.

[target]

its still insane to see someone will sell in OTC at current price. if these hodlers expect price to hit 150 next year. its a loss.

[yhiaali3]

Yes, they know that buying directly from the stock exchange will cause prices to rise excessively due to increased demand, so they buy outside the market to get a good price.

But as you indicated, this will not continue until the end because they will finally have to resort to exchanges to obtain the required amounts of Bitcoin. This will probably coincide with halving, which is just around the corner, so I expect that there will be a large demand during the coming months, especially with the reduction in rewards by half. This means We will get an ATH that exceeds all historical numbers for Bitcoin.

[Don Pedro Dinero]

Crisis? What crisis? I understand what the OP says but for us this is a great opportunity. There is going to be a reduction in supply and demand is going to go up. We know what this leads to. Those who don't have much bitcoin can take advantage of this to accumulate even more. We are on the verge of a bullish market. We have to take advantage of it and enjoy it.

[Charles-Tim]

This is a very good post. If more people are not selling and more people are buying, that means the price of bitcoin has to increase for more people to be encouraged to sell. That means the price of bitcoin will increase. After halving, bitcoin miners will most likely also not selling their new mined coins and all these will increase bitcoin price.

Regardless of the reasons for the decline (investors are taking their Bitcoin off exchanges and storing it in private wallets, or moving their Bitcoin to lending platforms in order to earn interest)

All the lending platforms are centralized. Their APR are very small and lending bitcoin is risky. It is better to just hold your coins on noncustodial wallet and have full control than depending on platforms like exchanges that can later disappoint you.

[pawel7777]

Pretty much every Bitcoin market analyst I've heard shared the same view as expressed in the OP, to the point I'm starting to feel sceptical. It all sounds too easy and too predictable.

It doesn't supprise me many people started holding their funds in a non-custodial wallet, after the many hacks, phishin and (exit)scams pulled by centralised exchanges in the past.

This. And to add, the biggest exchange, Binance, was getting bashed left and right and pushed off many markets. A lot of their customers either moved to other exchanges or withdrew to non-custodial wallets out of fears of regulators freezing Binance funds etc.