Cryptocurrency trading and exchange platform Bybit has released a new report highlighting the impacts of the upcoming Bitcoin halving event on Bitcoin supply dynamics across exchanges in the crypto space. The crypto firm provided valuable insights into how the halving event would improve scarcity and hugely influence the price of BTC.
Exchanges will face Bitcoin supply crisis
On Tuesday, April 16, Bybit published a new report providing a detailed analysis of the Bitcoin halving event taking place this month. The crypto firm revealed that Bitcoin reserves on the world’s crypto exchanges are rapidly depleting, leaving just nine months of BTC supply on exchanges.
For a clearer perspective, Bybit explains that with just two million Bitcoin remaining in its total supply, a daily inflow of $500 million into spot Bitcoin ETFs would result in approximately 7,142 BTC leaving exchanges daily. This suggests that it would only take nine months to completely consume all remaining BTC reserves on exchanges.
Bybit stated that one of the main contributors to this reduction in supply would be the upcoming Bitcoin halving event, which would reduce the cryptocurrency’s total supply by 50%, cutting Bitcoin miners’ rewards in half.
The cryptocurrency exchange also revealed that after the halving, the sell-side supply of BTC flowing to centralized exchanges (CEX) will be greatly reduced. Furthermore, the “Bitcoin supply constraint will apparently be worse.”
BTC will become “twice as rare as gold”
In its report, Bybit compared the supply of Bitcoin after the halving with that of gold. The crypto exchange revealed that Bitcoin was steadily rising to become one of the safest investment options for even the most experienced and sophisticated investors in the crypto space.
According to the exchange, Bitcoin’s halving would significantly impact the cryptocurrency’s scarcity factor, making it an even rarer asset than gold.
Basing this analysis on the stock-to-flow (S2F) ratio, Bybit revealed that Bitcoin’s S2F ratio is currently around 56, while gold’s ratio is 60. After the halving event in April, it projects that the Bitcoin’s S2F ratio will increase to 112.
“Each Bitcoin halving enhances the narrative of Bitcoin not just as a currency, but as a scarce digital asset, similar to digital gold. The next halving in 2024 will push BTC into an era of unprecedented scarcity, making it twice as rare as gold,” said Bybit co-founder and CEO Ben Zhou.
While highlighting the importance of Bitcoin’s rarity after the halving, another report also revealed that Bitcoin’s price would see significant upward pressure after the halving. This suggests that the reduction in BTC supply could push its price to new highs during this period.
Furthermore, the report revealed that several crypto analysts predict that the post-halving rise in Bitcoin’s price would be less notable than the initial pre-halving surge that saw Bitcoin’s price reach new highs of over $73,000.
