Bybit, one of the world’s top three crypto exchanges by volume, has released a new report showing that the current supply dynamics of Bitcoin leave only nine months of supply left on exchanges. This is due to the upcoming Bitcoin halving, which reduces supply by 50%.
Post-halving, the Bitcoin supply squeeze is expected to intensify. “Bitcoin reserves in all centralized exchanges have been depleting faster,” the report says. “With only 2 million bitcoins left, if we assume a daily inflow of $500 million to Bitcoin Spot ETFs, the equivalent of around 7,142 bitcoins will leave exchange reserves daily, suggesting that it will only take nine months to consume all of the remaining reserves.”
Indeed, the halving will make Bitcoin twice as rare as gold, according to the report. “The Stock-to-Flow (S2F) ratio is calculated by dividing the circulating supply of a commodity by its annual production, yielding a gauge of scarcity,” the report says. “Bitcoin’s S2F ratio is around 56 before the upcoming halving, while gold is 60. After the halving in April 2024, Bitcoin’s S2F ratio is projected to double to 112.”
Given this institutional investors have been ahead of the curve and positioned for this event in advance, especially since the U.S. approval of Bitcoin Spot ETFs. “Bitcoin is becoming the safest investment choice even for the most sophisticated investors in the crypto field,” the report says. “The price correlation between Bitcoin and the rest of cryptocurrency has been consistently high, and investment in Bitcoin has also been regarded as the cryptocurrency with the lowest beta.”
“Each Bitcoin halving sharpens the narrative of Bitcoin as not just a currency, but a scarce digital asset, akin to digital gold,” stated Ben Zhou, Co-Founder and CEO of Bybit. “This upcoming halving in 2024 will thrust Bitcoin into an era of unprecedented scarcity, making it twice as rare as gold.”
