This week, the price of Bitcoin has seen a significant increase. The market has experienced a bull run, leading to the OG-crypto currency reaching $63K. However, the surge in price can also be attributed to a supply shock. Recent data indicates that there is currently a 20% difference between the supply and demand for Bitcoin in the market.
According to the latest data released by Bitwise’s CIO, Matt Hougan, there is a notable gap between the supply and demand cycle of Bitcoin. The data shows that the demand for Bitcoin is currently over 30,000, while the availability of BTC is only 6,000. In simpler terms, this means that the demand is exceeding the supply by approximately 20.5%, as calculated by CoinGape. Hougan has previously stated that there is currently a high demand and a low supply of Bitcoin. This shortage of the original coin can lead to investors paying high prices for a small percentage of asset exposure.
The extreme demand for Bitcoin in the past week can also be attributed to the popularity of Bitcoin ETFs. With the current supply crunch, there is a possibility that the prices of BTC will continue to rise.
However, there are other factors at play that could affect the certainty of Bitcoin’s rise. These include a decrease in risk appetite, the Fed’s rate trajectory, and the upcoming Bitcoin halving. The volatile nature of crypto markets can also impact the price of Bitcoin.
At its peak, BTC’s price had surpassed $63,000, just slightly below its 27-month high of $68.7K. This increase shows that more traders are becoming interested in investing in Bitcoin. As of now, the price has dropped to $61,954.46, down by 1% from yesterday. The previous surge was driven by the hype around Bitcoin ETFs, but even these saw a slight outflow on Friday.
On Friday, there was a net withdrawal of $139 million from the Bitcoin spot ETF, according to SoSoValue data. This was the first outflow in seven trading days. The Grayscale ETF GBTC also saw a net outflow of $492 million in a single day. On the other hand, BlackRock ETF IBIT had a net inflow of $202 million, bringing its total historical inflow to $7.96 billion. Although the net inflow for BlackRock’s iShares Bitcoin ETF (IBIT) is significant, it is lower than the most recent influx. The previous inflow for BlackRock was over $7.95 billion, with its asset holdings increasing by $10.5 billion.
In conclusion, the recent surge in Bitcoin prices can be attributed to both the bull run in the market and the supply shock. The demand for Bitcoin is currently higher than its supply, which could push the prices even higher. However, other factors could affect the certainty of Bitcoin’s rise, and the volatile nature of crypto markets should also be taken into consideration.
