New York, NY – Following Bitcoin’s recent mining reward halving, market analysts at Bitfinex project that the demand for the cryptocurrency could potentially surpass its supply by five times. The halving, which occurred on Saturday, reduced the per-block reward paid to miners from 6.25 BTC to 3.125 BTC. This decrease is expected to significantly impact the daily supply of new coins, potentially dropping its notional value to $30 million.
According to analysts at Bitfinex, the daily issuance rate is projected to decline post-halving, resulting in approximately $40-$50 million in new Bitcoin mined. This number could potentially decrease to $30 million per day as smaller miner operations are forced to shut down. Despite recent fluctuations in flows, the average daily net inflows from spot Bitcoin ETFs still exceed $150 million.
Since the halving, the total number of new coins added to the daily supply has decreased to 450 BTC (nearly $30 million) from the four-year pre-halving average of 900 BTC. A supply squeeze has already been observed, indicating a shift in the market dynamics. Additionally, the average daily inflows into spot-based ETFs in the U.S. are expected to remain consistent in the months ahead, further influencing the cryptocurrency market.
Miners have been strategically managing their coin inventory leading up to the halving, with many reducing their holdings to fund upgrades in preparation for post-halving operations sustainability. Data from Glassnode shows a significant decrease in the number of coins held in wallets tied to miners in the months preceding the halving, suggesting a proactive approach to adapt to the changing market conditions.
Investors are increasingly opting to take direct custody of their coins, further impacting the supply side of the market. This shift is reflected in current on-chain data showing rising Bitcoin exchange outflows, indicating a trend towards cold storage among investors anticipating price increases. Despite this, the market has shown resilience to selling pressure from long-term holders, with new market entrants absorbing the impact.
As of the latest data, Bitcoin is trading at $66,660, up over 5% since the halving, defying expectations of a price correction. The broader market gauge, the CoinDesk 20 Index, has also seen a nearly 7% increase. Thus, the cryptocurrency market continues to adapt to the recent halving, with stakeholders closely monitoring the evolving dynamics.