Bitcoin Halving to Push BTC Price At $273K, Demand-Supply Ratio At 13x

The Bitcoin (BTC) price has been facing some selling pressure recently, however, the demand/supply dynamics are completely tilting in its favor. Furthermore, things are likely to get even more interesting in the next two months as supply gets cut down by another 50% after the Bitcoin halving.

Bitcoin Halving to Change Demand/Supply Dynamics

Renowned crypto analyst Willy Woo sheds light on the considerable gap between new investor demand and fresh supply in the Bitcoin network.

According to Woo’s analysis, the Bitcoin network is currently witnessing a staggering influx of approximately $607 million per day in new investor demand, juxtaposed with a comparatively modest $46 million per day in new supply from newly mined coins.

With the Bitcoin halving of new supply looming just 60 days away, Woo emphasizes the significance of this impending event. He calculates new demand by observing changes in realized capitalization, which represents the cumulative price investors paid for their BTC holdings. However, it’s worth noting that this method may underestimate true demand, as it does not account for off-chain buy/sell activities.

BTC Price Expectations After Bitcoin Halving

While the Bitcoin supply continues to drop and demand continues to rise, it’s certainly going to act as an upward catalyst for BTC. Commenting on Willy Woo’s tweet MacronautBTC presents an interesting arithmetic of how the BTC price can 5x from the current levels, on a conservative basis.

MacronautBTC’s analysis centers on the aftermath of the halving event, positing a scenario where the daily demand for Bitcoin, estimated at $607 million post the Bitcoin halving, outpaces the daily new supply by $23 million. Extrapolating this imbalance over 250 trading days in a year, MacronautBTC projects an additional market capitalization of $1.46 trillion.

Hows my arithmetic:

Assume from halving:
$607M daily demand minus $23M daily new supply =

$584M daily demand * 250 trading days in a year = $1.46T new ADD'L mkt cap.

~every 1T in market cap is $50k in $BTC price, right? So that would be a new #bitcoin price of $123k.

(cont'd)

— MacronautBTC (@Macronaut_) February 23, 2024

According to MacronautBTC’s calculations, every $1 trillion increase in market capitalization corresponds to a $50,000 surge in Bitcoin’s price. Applying this metric, the projected additional market capitalization of $1.46 trillion could potentially drive Bitcoin’s price to reach $123,000.

MacronautBTC further suggests a conservative “multiplier” approach, proposed by fellow analyst Willy Woo, which indicates a potential threefold increase in the value of Bitcoin relative to the USD inflow. Combining this multiplier with the projected additional market capitalization, MacronautBTC envisions a total market capitalization of $5.38 trillion within a year, translating to a Bitcoin price surge to $273,000.