Bitcoin Halving to Deplete Exchange Reserves within Nine Months, Bybit Predicts
Summary:
Upcoming Bitcoin halving could lead to a significant depletion of Bitcoin reserves on cryptocurrency exchanges within the next nine months, predicts Bybit. With institutional interest in Bitcoin gradually building, both traditional institutions and crypto-native firms are gaining wider exposure to Bitcoin through ETFs or proxy stocks such as MicroStrategy. Bybit forecasts an increased engagement from more institutions in the Bitcoin market.
The upcoming Bitcoin halving, with its 50% reduction in Bitcoin issuance, could deplete Bitcoin reserves on cryptocurrency exchanges within the next nine months. This prediction, reported on April 15 by Bybit, hinges on continued inflows from US Bitcoin exchange-traded funds (ETFs).
The report explains that the decreasing reserves of Bitcoin on centralized exchanges—now down to 2 million—suggest that if the Spot ETFs maintain their daily inflow of $500 million, roughly 7,142 bitcoins will be used up each day. At this rate, the remaining reserves will be used up in approximately nine months.
The quantity of Bitcoin on centralized exchanges has already fallen to its lowest point in nearly three years, hitting 1.94 million BTC on April 16 according to CryptoQuant data. Despite the broader market downturn and a 10% fall for Bitcoin this week, bringing the cost down to $62,924, Bybit anticipates that the price of Bitcoin will recover after this correction.
The report suggests the halving could even instigate a price surge by reducing supply, pushing Bitcoin to new record highs. Institutional interest in Bitcoin has gradually grown, though inflows into Bitcoin ETFs have slowed since March.
Contrary to the $2.58 billion in net inflows to ETFs at the start of March, last week saw just $199 million. However, Bitcoin ETFs have accrued over 841,000 BTC—equivalent to $52.9 billion—and $12.7 billion in net flows since their launch, according to data from Dune.
Figures from February 24 suggest increased Bitcoin allocation from investors—on average, institutions now allocate 40% of total assets to BTC, while retail investors assign an average of 24%. Bybit's report contends that both traditional institutions and crypto-native firms are gaining wider exposure to Bitcoin via ETFs or proxy stocks such as MicroStrategy, and forecasts that more institutions will do the same.
Published At
4/16/2024 5:01:40 PM
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