As Bitcoin’s popularity grows, analysts predict a possible supply shock due to the decreasing availability of BTC on exchanges. The value of Bitcoin is expected to skyrocket due to a decrease in supply and increased demand.
Overview of the US Market and Bitcoin
According to CryptoRUS’ George Tung, the United States market remains volatile due to conflicting studies on the Fed’s stance and varying opinions of Wall Street traders.
Regardless, Bitcoin’s worth has remained stable and outperforms tech and Chinese shares.
Tung believes that Bitcoin’s long-term potential is clear and will always dominate the market due to its consistent development over the previous 5 to 10 years.
Crypto Value Divergence in 12 Months
Bank of America predict’s that 2023 will be the year of cryptocurrency value divergence, implying that the various classes or niches of cryptocurrencies will become more apparent.
Bitcoin’s market dominance will continue to influence the worth of other cryptocurrencies in their respective classes, such as utility coins, free coins, and stablecoins.
Bitcoin Exchange Provider
George Tung emphasizes the decreasing availability of Bitcoin on exchanges, which has reached a five-year low. While this may be interpreted as bullish, it may also indicate a potential supply shock sooner or later.
As demand for Bitcoin grows, the cryptocurrency’s exchange scarcity may drive up its value, creating a supply and demand imbalance.
Corporations with Bitcoin
Many corporations hold large amounts of Bitcoin, further reducing its availability. Block, for example, has $130 million in Bitcoin, whereas Galaxy Digital has 40,000.
Tesla holds over 10,000, and Grayscale Belief has 640,000 Bitcoins, among different entities. This figure is expected to rise as more businesses invest in Bitcoin.
Provide Shock Consequences
A supply shock can severely affect Bitcoin’s value and the cryptocurrency market. Demand is expected to rise as Bitcoin exchanges become more scarce.
This could result in a massive increase in Bitcoin’s value, breaking its previous high and reaching new levels of importance.
The implications of this could significantly impact the overall cryptocurrency market, as the value of Bitcoin typically influences the value of other cryptocurrencies.
The Fundamentals of Bitcoin
Bitcoin’s fundamentals are also stable, with the Lightning Network reaching an all-time high for liquidity and the hash price continuing to rise.
Bitcoin may also be following fractal patterns similar to its previous breakout in 2018-2020. The Lightning Network has evolved into a critical payment network, and Bitcoin’s worldwide adoption is expected to fuel demand even further.
