The Bitcoin community is currently buzzing with discussions about impending supply shocks, a market phenomenon where demand outstrips supply and can lead to significant price increases. Indicators for various sectors within the market are currently converging, suggesting such an event may be closer than many expected. Here we take a closer look at three signs of an impending supply shock.
#1 Rapid increase in demand for Bitcoin ETFs
Bitcoin ETFs have generated tremendous demand since their launch. Initially, this surge in demand was tempered to some extent by significant outflows from the Grayscale Bitcoin ETF (GBTC). However, the 13th day of the Bitcoin ETF once again showed that Grayscale outflows are gradually slowing down (yesterday: $220.7 million, previously $191.7 million), while the past two business days saw net inflows of approximately $250 million across all ETF issuers.
Swan Managing Director Dan Ripoll provided further information. analysis About the size of this. “Bitcoin Spot ETF has already gained 150,500 BTC in just 13 business days. They are buying at a rate of 12,000 BTC per day. Now let’s KISS (just keep it stupid) ). Only 900 BTC are issued per day. BTC is bought up at a daily issuance rate of 13 times. After 3 months, the amount of issuance will be cut in half, and the imbalance between supply and demand will increase per day. That’s an astonishing 26 times more issuance.”
Additionally, respected Bitcoin analyst Alessandro Ottaviani said: underlined “Bitcoin ETF inflows consistently outpace grayscale outflows, so the only way to meet that demand is for price increases. Once we reach $60,000 and even higher after the new ATH, FOMO has officially kicked in, and it will be unlike anything humanity has ever experienced.”
WhalePanda, a prominent crypto analyst, highlighted the recent activity, adding credence to the emerging supply shock. “Yesterday, approximately $250 million more net inflows entered Bitcoin ETFs, with BlackRock alone seeing a solid $300 million inflows. $250 million in inflows in two days, Prices didn’t rise much yesterday, but if a few days like this continue, we’ll see what kind of supply shock this creates for BTC.”
#2 Bitcoin miners’ huge sales will be absorbed
Despite the large flow of coins from minor wallets to spot exchanges, the market has shown remarkable resilience. According to a report from Cryptoquant:
“Yesterday, the flow of coins in minor wallets to spot exchanges hit the highest level since May 16, 2023. In total, more than 4,000 Bitcoins flowed to spot exchanges, amounting to around $173 million. However, this selling pressure was calmly absorbed by the market. ”
Despite these interactions, reserves in the mining portfolio have remained consistent since early January, indicating that the market is effectively absorbing selling pressure without significant price declines. It is important to note that
#3 Stablecoin aka “Dry Powder” is on the rise
A stablecoin’s market capitalization serves as a harbinger of potential market fluctuations. Recently, the market capitalization of stablecoins has shown a significant recovery, rising from the bottom of $119.5 billion in mid-October 2023 to nearly $130 billion.
This increase in stablecoin reserves is often interpreted as “dry powder” ready to be deployed into assets like Bitcoin, potentially further accelerating the supply and demand mechanism. there is. Regarding the correlation between stablecoin reserves and BTC price, Alex Svanevik, founder of on-chain analytics platform Nansen, said, “When exchange stablecoins peaked, BTC price also peaked.” Stated.
At the time of writing, BTC was trading at $42,848.
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