Donald Trump’s recent election victory has been viewed as a potential catalyst for Bitcoin ’s price surge, but analysts suggest that the primary driver behind the cryptocurrency’s upward momentum stems from the dynamics of post-halving supply constraints. The anticipation following Bitcoin ’s halving event in April, which reduced block rewards from 6.25 BTC to 3.125 BTC, has created a scarcity of supply. This reduction makes each block more challenging to mine while offering less reward, leading to an accumulation of a supply shock in the market.
As the market attempts to find an equilibrium between supply and demand, analysts assert that the current availability of Bitcoin is insufficient to meet rising demand at existing price levels. Consequently, the price of Bitcoin is expected to rise, potentially triggering a market frenzy akin to previous bubbles. Historically, Bitcoin has exhibited similar patterns following its halvings in 2012, 2016, and 2020, suggesting a cyclical trend that may lead to significantly higher prices in the near future.
Comparing Bitcoin to gold reveals that gold ’s market capitalization has surged by about $6 trillion over the past year, yet it continues to see substantial new and recycled supply. In contrast, Bitcoin , with a market capitalization of approximately $1.6 trillion, has a far more limited supply. Currently, around 94% of all Bitcoin in circulation is already accounted for or has been lost, leaving only about 1.2 million BTC left to be mined. This scarcity indicates a tight supply situation, reinforcing the likelihood of price increases as demand continues to rise.
Market participants are expressing confidence in Bitcoin ’s future, suggesting that those who have not yet invested are still in an advantageous position. As institutional interest grows and countries begin to adopt strategic reserves of Bitcoin , the stage is set for a potentially significant boost in value over the forthcoming months.
