When I study the latest analysis of Bitfinex on Bitcoin supply dynamics, what catches my attention are possible implications for investors like me.
This is very important as it suggests that the new Bitcoin supply entering the market could drop to as low as $30 million per day post-halving. This would potentially mean tighter Bitcoin supply and may affect its future price.
Link
This idea is mind-boggling as it suggests that factors such as reduced miner selling and increased investor custody might lead to this supply squeeze.
Therefore over time, Bitcoin may become rarer which could cause upward pressure on prices. So this is something I will be watching closely as I maneuver through the cryptocurrency business.
The effect of spot-based ETFs in the U.S. is an aspect that I found quite interesting. These ETFs provide a different way for investors to get Bitcoin exposure without buying Bitcoin directly (somewhat escaping volatility). But there are some doubts about their impact on the market.
It will be fascinating to observe how average daily inflows into these funds evolve in the next few months and interact with other market dynamics.
Concerning long-term holders, another point is worth discussing. The fact that they have not yet caused the usual pre-halving price decline implies that such selling pressure has been well absorbed by new participants of this market.
This means there is still confidence in the future potential of bitcoin amongst traders and investors which can potentially push its price higher.
When speaking about risk management, the most important thing is to be cautious when investing especially during a volatile market (bull run).
I follow this principle of diversifying my investment portfolio and only investing what I can afford to lose. It has helped me in managing risks, avoiding short-term market fluctuations driven decisions.
Link
Recent research work done by Bitfinex has been able to give us a new view of the Bitcoin post-halving that is questionably interesting.
So, what does it mean for the future value of Bitcoin when put together with other factors that could cause supply squeeze?
As an investor, it's super viral to keep watching these trends closely and make changes on your investment plan accordingly.