Post-Halving: Bitcoin Will Be Twice as Scarce as Gold

Azeez Mustapha

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Following each halving, Bitcoin (BTC) becomes increasingly scarce, and analysts from the leading crypto exchange, Bybit, predict that the upcoming event, expected in the next four days, will make the digital asset twice as rare as gold.

A report outlining the anticipated changes before and after the Bitcoin halving indicates that BTC will undergo a supply squeeze afterward, potentially depleting reserves on all centralized exchanges within nine months.

Twice the Rarity of Gold
Bybit has highlighted that the Bitcoin stock-to-flow (S2F) model supports its assertion, indicating that BTC becomes scarcer than gold following each halving.

The S2F ratio, a measure of scarcity, is calculated by dividing a commodity’s circulating supply by its annual production.As of now, Bitcoin’s S2F ratio stands at approximately 56, compared to gold’s 60. Post-halving, Bitcoin’s ratio is anticipated to double to 112.

The halving event reduces BTC production, slowing its supply and potentially leading to a supply crunch. Bitcoin is already exhibiting early signs of a shortage, which may intensify post-halving.
Post-Halving: Bitcoin Will Be Twice as Scarce as GoldTypically, the supply of BTC for spot Bitcoin exchange-traded funds (ETFs) originates from centralized exchanges, as investors liquidate profitable positions and miners sell their block rewards.

However, with reduced mining rewards and investors holding onto assets, miners may delay selling, leading to a decrease in sell-side supply flowing into exchanges.

An Intricate Cycle
At present, approximately two million bitcoins are held in centralized exchange reserves. Assuming spot Bitcoin ETFs witness daily inflows of $500 million, around 7,142 BTC will be withdrawn from exchange reserves daily, suggesting that the reserves will only last nine months post-halving.

Despite halvings typically triggering bitcoin price increases, analysts view this cycle as intricate and harbor uncertainty about the impact of the upcoming event, especially since BTC has already reached a new high. Some anticipate that the post-halving rally will be less dramatic than previous occurrences.

Nonetheless, market experts anticipate that demand will propel the BTC post-halving surge this time around, particularly as spot Bitcoin ETFs reach their full potential.

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Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.

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