The recent increase in Bitcoin's value cannot be solely attributed to Donald Trump’s election win in the United States, according to Jesse Myers, co-founder of Onramp Bitcoin. He emphasized that the primary driver of Bitcoin's price rally could be the aftermath of the recent halving event rather than political changes.
In a post shared on X on November 11, Myers explained, “If you’re curious about the current dynamics surrounding #Bitcoin… Yes, the incoming administration appears to be more favorable toward cryptocurrency, offering a recent incentive. However, that is not the central narrative here.”
He pointed out that we are now six months past the latest halving, which occurred in April when Bitcoin’s block rewards were reduced from 6.25 BTC to 3.125 BTC. This reduction means that mining each new block has become more challenging, leading to diminished rewards.
Myers elaborated that the implications of this halving have resulted in a significant supply shock: "Current supply levels fail to meet the rising demand at the current pricing, necessitating a restoration of the equilibrium between supply and demand."
The introduction of Bitcoin exchange-traded funds (ETFs) this January has further intensified this demand. On November 11 alone, U.S. Bitcoin ETFs experienced a remarkable influx, acquiring approximately 13,940 BTC in a single day, contrasting sharply with a mere 450 BTC that were mined.
“To rectify the imbalance, prices must escalate, which could lead to a cycle of enthusiasm and potentially create a bubble, but that’s the nature of the market,” he added.
Myers acknowledged that while it may sound irrational to predict a consistent and predictable bubble every four years, the unique nature of Bitcoin, with its supply halving every four years, produces this phenomenon. “A post-halving bubble is a typical outcome,” he stated, recalling similar occurrences after the halvings in 2012, 2016, and 2020. He confidently predicted that this cycle would unfold again, driving prices substantially higher.
Onchain analyst James Check shared similar observations, likening Bitcoin's market capitalization to that of gold, which has gained about $6 trillion in value over the past year, albeit with a continuous influx of hundreds of billions worth of new and recycled supply.
In contrast, Bitcoin's market cap currently stands at $1.6 trillion, which he classified as “extremely scarce,” especially considering that many holders have faced significant market turmoil previously. He anticipates further price increases.
On November 12, financier Anthony Scaramucci expressed similar thoughts, advising potential investors who might feel they've missed the opportunity to buy Bitcoin, “It may seem like it’s too late, but it’s not. We are still in the early stages.”
Scaramucci is optimistic that the U.S. will develop a strategic reserve of Bitcoin, a move he expects other nations to follow, along with institutional investors and asset managers.
As of now, around 94% of all Bitcoin that can ever exist is already in circulation or has been lost, which leaves approximately 1.2 million BTC remaining to be mined, intensifying the pressure on supply and demand.
