Bitcoin’s recent surge has captured headlines, but analysts argue that the primary driver is not the U.S. presidential election outcome.
While Donald Trump’s victory may have sparked optimism for a Bitcoin-friendly administration, experts say the real catalyst lies in the cryptocurrency’s unique supply dynamics following its April halving.
“Yes, the incoming administration has provided a recent catalyst… But that’s not the main story here. The main story is that we are 6+ months post-halving,” Jesse Myers, co-founder of Onramp Bitcoin, wrote in a post on X.
Bitcoin Halving Creates a Supply Shock
The Bitcoin halving reduced block rewards from 6.25 BTC to 3.125 BTC, effectively slashing the rate of new Bitcoin entering circulation.
Myers highlighted that this supply reduction creates a “supply shock” that tightens availability at current price levels.
With demand continuing to rise, particularly from Bitcoin exchange-traded funds (ETFs), a price adjustment becomes inevitable.
On Nov. 11, Bitcoin ETFs in the U.S. recorded massive inflows of approximately 13,940 BTC in a single day. For perspective, only 450 BTC are mined daily.
“The only way to satisfy this imbalance is for prices to rise,” Myers explained, adding that Bitcoin’s four-year halving cycles often lead to predictable market bubbles.
Historical data supports this claim, as similar post-halving surges occurred in 2012, 2016, and 2020.
Onchain analyst James Check also weighed in, comparing Bitcoin’s $1.6 trillion market cap to gold, which has added $6 trillion in value over the past year despite an influx of recycled supply.
In contrast, Bitcoin’s absolute scarcity and steadfast holders—many of whom have weathered significant volatility—set it apart.
Check predicts this scarcity will drive prices higher as demand intensifies.
Adding to the optimism, American financier Anthony Scaramucci expressed confidence in Bitcoin’s future, suggesting that the U.S. could establish a strategic Bitcoin reserve.
He assured investors that it’s “still early” for those looking to go long on the cryptocurrency.
With 94% of all Bitcoin already mined or lost, only about 1.2 million BTC remain to be extracted.
This finite supply intensifies competition among buyers, further supporting the post-halving price surge.
Analysts believe this unique economic framework ensures Bitcoin’s upward trajectory, even as its adoption grows globally among institutions and nations.
MicroStrategy Purchases More BTC
Further strengthening market sentiment, Michael Saylor’s MicroStrategy has bolstered its position as the largest corporate holder of Bitcoin with a new purchase of 27,200 BTC.
As reported, the acquisition, valued at $2.03 billion, was made between October 31 and November 10, 2024, at an average price of $74,463 per coin, including fees.
The latest addition brings MicroStrategy’s total Bitcoin holdings to approximately 279,420 BTC, acquired for an aggregate $11.9 billion.
The company’s average purchase price now stands at $42,692 per coin, compared to Bitcoin’s current price of $81,700.
In other positive news, digital asset investment products attracted a robust $1.98 billion in the past week, marking the fifth consecutive week of inflows.
The influx brings the year-to-date figure to a record $31.3 billion, according to a recent report from CoinShares.
The surge in investments has pushed the global assets under management to a new peak of $116 billion.
The post Bitcoin Rally Driven by More Than Just Trump Victory, Analyst Points to Post-Halving Supply Shock appeared first on Cryptonews.
