Bitcoin faces a potential supply shock amid institutional demand
According to Cointelegraph, Bitcoin is expected to enter a supply shock period, which could lead to significant price changes compared to previous cycles. Catalin Tischhauser, head of research at the SigNum Group for digital asset banking services, highlighted the potential impact of high demand on Bitcoin's market value. She explained that every dollar of demand could lead to an increase in its market value by $20-30, a phenomenon observed after the launch of Bitcoin exchange-traded funds and during the U.S. elections.
Tischhauser indicated the limited supply of cash liquidity for Bitcoin compared to the high demand from institutional capital, as a factor that could drive Bitcoin prices up in the coming months. She noted that the supply of cash liquidity has seen a steady decline over the past eighteen months, partly attributed to the rise of Bitcoin acquisition platforms such as Strategy and Twenty One Capital. Structural factors, such as increased regulatory clarity, macroeconomic pressures, and Bitcoin's attractiveness as a deflationary asset, also contribute to enhancing positive expectations for Bitcoin.
Bitcoin exchange-traded funds (ETFs) have seen minimal outflows, having only experienced four days since April 16. Forster, the founder of Derive, shared his insights with Cointelegraph, noting that Bitcoin may be undergoing a consolidation phase, which he described as a 'healthy pause.' This pause will give the market time to absorb recent gains and prepare for the next growth phase. Some analysts expect much higher price targets for Bitcoin, ranging from $200,000 to $300,000, indicating optimism about its future trajectory.