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Bitcoin supply shock has already started, analyst points out
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The price of Bitcoin (BTC) surpassed the mark US$ 108 thousand this week, and the analyst Willy Woo declared that the market is facing a new supply shock in the market.
In a post on the social network X, Woo stated:
According to Woo, the two other significant shocks occurred in 2012 and 2020preceding strong waves of appreciation of digital currency. He believes that the current scenario marks the beginning of a new and substantial price increasewith the asset attracting even more interest from investors and institutions.
One Bitcoin supply shock happens when there is a reduction in the amount of BTC available for sale on the market. This usually occurs due to accumulation by large investors or the decision of hodlers to hold their coins, reducing the circulating volume.
As Bitcoin has a limit of 21 million unitsany reduction in available supply intensifies its scarcity. Basic economic theory explains that, with reduced supply and constant or growing demand, the price tends to rise.
In this context, Woo predicts that this new shock could lead to Bitcoin reaches new levels of appreciationespecially with the entry of institutions and governments on the market.
The analyst highlighted that companies are copying the company’s strategy MicroStrategya giant in the software sector that has 439,000 BTC in reserves. Recently, the company entered the Nasdaq 100 list, consolidating itself as the largest corporate holder of Bitcoin in the world.
Furthermore, Woo warned that Governments may be discreetly accumulating Bitcoinwith emphasis on the United States. The president-elect donald trump has already expressed interest in transforming the Bitcoin confiscations in strategic reserve assets.
In the USA, there is also a bill for the purchase of 1 million BTC. This movement is already inspiring similar proposals in other countries, including Brazil, increasing pressure on the supply of digital currency.
Combining the supply shock and increased institutional demand, Woo predicts the market is entering a dynamic similar to those of 2012 and 2020when the amount of Bitcoin available on exchanges has decreased as demand skyrocketed.
Bitcoin supply shock has already started, analyst points out
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Bitcoin supply shock has already started, analyst points out
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Bitcoin supply shock has already started, analyst points out
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Bitcoin supply shock has already started, analyst points out
