Analysts at CryptoQuant have made a groundbreaking discovery: demand from long-term Bitcoin holders has surpassed issuance levels for the first time ever, setting the stage for a potential surge in prices.
According to recent research, Bitcoin’s long-term holders are accumulating around 200,000 BTC per month, significantly eclipsing the monthly issuance of approximately 28,000 BTC. This trend is unprecedented in Bitcoin’s history and underscores a notable shift in its supply-demand dynamics.
With the upcoming halving expected to further reduce monthly issuance to about 14,000 BTC, analysts at CryptoQuant view this surge in demand as a significant development in the cryptocurrency’s market dynamics.
Arthur Breitman, co-founder of Tezos, described the halving as a “reduction in security budget,” noting that while the change in mining rewards could benefit the Bitcoin ecosystem in the short term, it also highlights the necessity for future adjustments to emission policies to maintain security.
Breitman cautioned that projections based solely on the halving might be shortsighted, emphasizing the need for a more comprehensive approach to address long-term security concerns.
However, opinions within the crypto community vary. Arthur Hayes, former CEO of BitMEX, predicts potential price declines before and after the halving due to limited dollar liquidity during this period. On the contrary, Marathon CEO Fred Thiel suggests that the halving’s impact may already be priced in, citing recent successful spot exchange-traded fund (ETF) approvals as evidence.
As Bitcoin miners brace for reduced rewards, the halving slated for mid-April will slash mining rewards from 6.25 to 3.125 BTC per block. This process, intrinsic to the Bitcoin network protocol, occurs automatically upon reaching a programmed block height. It is anticipated that all 21 million BTCs will be mined by approximately 2140, after which miners will rely solely on transaction fees for rewards.
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