Bitcoin’s recent price surge has garnered significant attention, but analysts argue the primary catalyst isn’t solely political. Although Donald Trump’s presidential win has sparked optimism for a Bitcoin-friendly administration, experts say Bitcoin’s unique supply dynamics post-halving are driving the upward momentum.
Bitcoin Halving: A Key Supply Shock
The April halving event reduced Bitcoin block rewards from 6.25 BTC to 3.125 BTC, effectively decreasing new Bitcoin supply. Jesse Myers, co-founder of Onramp Bitcoin, explains that this reduction has created a “supply shock” that is tightening availability as demand continues to rise—especially with the influx of institutional investments, such as Bitcoin ETFs.
On November 11 alone, Bitcoin ETFs in the U.S. recorded inflows totaling approximately 13,940 BTC, a massive figure compared to the daily 450 BTC mined. Myers suggests that rising demand against limited supply leads to inevitable price adjustments, as evidenced by similar surges in previous post-halving years like 2012, 2016, and 2020.
Bitcoin’s Finite Supply Advantage
On-chain analyst James Check compares Bitcoin’s $1.6 trillion market cap with gold’s recent $6 trillion increase. While gold benefits from a continuous supply of recycled material, Bitcoin’s absolute scarcity—94% of its total supply has already been mined or lost—amplifies its value. Check believes that this scarcity, combined with resilient holders, will drive prices higher as demand intensifies.
American financier Anthony Scaramucci has also voiced optimism, suggesting the U.S. might establish a strategic Bitcoin reserve, assuring investors it’s “still early” for those looking to invest.
MicroStrategy’s Strategic BTC Acquisition
Reinforcing bullish sentiment, Michael Saylor’s MicroStrategy recently acquired 27,200 BTC, valued at $2.03 billion, between October 31 and November 10, 2024, at an average price of $74,463 per coin. With this latest purchase, MicroStrategy holds around 279,420 BTC, bought at an average of $42,692 per coin.
Record Inflows Reflect Growing Institutional Confidence
The market’s positive outlook is further supported by record-breaking inflows into digital asset investment products, which totaled $1.98 billion in the past week, per CoinShares. This brings the year-to-date inflows to a record $31.3 billion, pushing global assets under management in crypto to $116 billion.
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