Is Bitcoin on track for a supply shock?
Bitcoin is considered the world's scarcest asset, with a maximum supply of 21 million units.
Bitcoin is considered the world's scarcest asset, with a maximum supply of 21 million units. Of the currently circulating 19.8 million coins, only a fraction is actually available on the market. On crypto exchanges there are according to recent measurements about 2.5 million BTC and that number is still declining. In April 2024 this figure was half a million coins higher.
“The trend is clearly downward,” writes on-chain-analyst Carmelo_Alemán on the CryptoQuant platform. But does this mean a supply shock is looming?
According to Alemán, that chance in the short term is real. He does warn, though, that at a certain price peak a wealthy group could enter the market: the miners.
“If the price rises to $130,000 or $140,000,” he says, “then it is very likely that miners would significantly ramp up their selling activity. After all, in the past they have often profited from price increases by cashing out their stock.”
That behavior could slow the decline in exchange reserves—and thus also the threat of a structural supply shock, the analyst concludes.
Yet the near-term signals point toward growth. On Monday, April 28, Bitcoin ETFs recorded record inflows, an indication that demand for BTC is rising strongly.
