Donald Trump’s election victory in the United States, Bitcoin 
$88,102It is not seen as the main reason for the recent price increase. While Jesse Myers, co-founder of Onramp Bitcoin, acknowledged that the new Bitcoin-friendly administration provided a partial catalyst, he stated that the real reasons were related to the post-halving supply shock.
Supply Shock After Halving
The Bitcoin halving, which took place in April, reduced block rewards from 6.25 BTC to 3,125 BTC. This means that each new block becomes more difficult to solve and the reward decreases. “The real story is that we are more than 6 months from the halving,” said Myers.
Decreasing supply indicates that there is not enough supply at current prices to meet demand. “The price would have to go up, which could turn into a bubble,” Myers added. Onchain analyst James Check stated that gold added approximately $6 trillion to Bitcoin’s market value last year compared to gold, but Bitcoin only has a market value of $1.6 trillion.
Increase in Demand for Bitcoin
Anthony Scaramucci reassured those who have not yet invested in Bitcoin by saying, “You may feel like it is late, but you are still in the beginning stages.” The United States is expected to create a strategic Bitcoin reserve and other countries will follow suit. Currently, 94% of existing Bitcoin is in circulation or missing, meaning only about 1.2 million BTC are added to the circulating supply.
Bitcoin’s supply halving every four years has historically resulted in price increases and bubbles. This cycle ensures that Bitcoin remains a unique investment tool, and prices are expected to rise further in the future.
Bitcoin investors predict that prices will continue to increase due to the effect of the supply shock after the halving. While decreasing supply and increasing demand increases the value of Bitcoin, the interest of institutional investors and governments also increases its amount. These dynamics support the long-term sustainability of Bitcoin.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that crypto currencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
