Cryptocurrency enthusiasts are buzzing with excitement as Bitcoin gears up for its fourth halving, a historical precursor to substantial price increases. Analysts are now eyeing an impressive target of $273,000 for Bitcoin, fueled by a strong demand-supply ratio and past market trends.
Dive into the analysis and discover why the demand-supply equation is tilting in Bitcoin’s favor, and what the halving could mean for your portfolio.
Crypto analyst Willy Woo recently shared a crucial insight on Twitter—every day witnesses a whopping $607 million in new investments flowing into the Bitcoin network. On the flip side, only about $46 million in new Bitcoin is generated daily through mining.
The impending halving, where the creation of new Bitcoin will be halved, adds an intriguing twist to this daily dynamic.
Countdown to Supply Reduction
Woo’s analysis points to the supply reduction happening in just 60 days, marking a potential turning point for Bitcoin. To measure new demand, Woo uses the change in the realized cap, a metric reflecting the cumulative price paid for Bitcoin holdings.
It’s worth noting that this method might not capture all buying and selling activities happening off the primary Bitcoin network.
Also Read: Countdown to Bitcoin Halving 2024 Has Begun! Here’s What to Expect
Digging into the numbers, MacronautBTC conducted some simple arithmetic. The daily demand for Bitcoin, estimated at $607 million, exceeds the daily new supply by $23 million. Subtracting the daily new supply from the daily demand reveals a noteworthy $584 million daily demand.
Projected over 250 trading days, this translates to a substantial additional market capitalization of $1.46 trillion.
According to MacronautBTC’s calculations, every $1 trillion increase in market capitalization corresponds to a $50,000 surge in Bitcoin’s price. Using this straightforward metric, the expected additional market capitalization of $1.46 trillion could potentially drive Bitcoin’s price to reach $123,000.
Taking a cautious approach, MacronautBTC introduces a “multiplier” method, in line with fellow analyst Willy Woo, suggesting a potential threefold increase in Bitcoin’s value relative to the USD inflow.
Combining this multiplier with the projected additional market capitalization, MacronautBTC envisions an overall market capitalization of $5.38 trillion within a year, leading to a Bitcoin price surge to $273,000.
While projections in the crypto market are inherently speculative and contingent on various factors, this optimistic outlook from MacronautBTC underlines the positive sentiment surrounding Bitcoin, especially as the halving event approaches.
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