Bitcoin has had a very bumpy journey; first, it was not taken seriously, and it couldn’t even account for a single dollar, but then the financial world came around, and investors were eager to get their hands on the flagship cryptocurrency, and its price soared. It soared so much so that it reached almost $65K; this is the point where everyone, every single person of interest, was tempted by Bitcoin and wanted nothing but to invest in it and amass more and more of it.
But then China backed out on Bitcoin altogether, and the mining rate declined, which resulted in the mid-may crash, and the price of Bitcoin was reversed, reaching almost $30K. Investors did lose a lot of money, and traders were all set to back out on Bitcoin; it is the volatility of Bitcoin which presents these unprecedented scenarios and the market corrections which have to kick in at some point in time.
Bitcoin’s Supply Shock
Once again, Bitcoin is doing just fine, and the investors and traders are all back on the Bitcoin train; countries are adopting Bitcoin, and El Salvador is the most glittering example of that. The tech world, financial world, banks, and even some fractions of the stock market are adopting Bitcoin, and for this reason alone, its reserves have gone scarce and are lowest in the three years.
The main question is, what does it indicate for the price of Bitcoin in the long run? At present, there is no equilibrium between withdrawal and deposit; investors are buying as much Bitcoin as they can, and of which most of it is already in withholding, and the new tokens alone are not able to match up the circulation of the flagship cryptocurrency.
This means that there is less and less of Bitcoin present in the market, and it usually points towards a bullish run which is going to accompany Bitcoin in the long run, but then again, the market will catch up as investors at some point would have to dump their stash which would make the price to go under for some time until the correction is over and then the cycle repeats itself.