Bitcoin’s New Mania Has a Lot To Do With ‘Simply Not Enough’ Supply

(CTN News) – Market mania surrounding bitcoin (BTC-USD) is driven by a fundamental law of economics: supply and demand.

A greater number of bitcoins are being purchased each day than are being created.

There are several reasons for this imbalance, including the appetite created by a series of US-listed bitcoin exchange-traded funds that were approved by the Securities and Exchange Commission in January and have attracted significant amounts of new investor money.

These products have purchased an average of 3,500 to 4,300 coins each day since the beginning of February, according to three analysts who work for crypto money managers.

Over the same period, the bitcoin network generated approximately 900 coins per day.

According to Grayscale Investments research head Zach Pandl, there are insufficient to satisfy all of the new demand, and so natural supply/demand dynamics are driving up prices.

On Thursday, Bitcoin rose above $63,000, putting it within striking distance of its all-time high of nearly $69,000, reached in November 2021. In the early hours of Friday, it was changing hands for approximately $62,220.

During February, the stock gained 44%, its best performance since December 2020.

In other words, a halving

A “halving” scheduled for two months from now may result in further supply problems.

Satoshi Nakamoto, a pseudonymous software programmer, created in 2009 with a four-year supply cycle.

There will be 450 coins per day instead of 900 following this next cut, the so-called halving.

Prices could rise as a result.

According to Mark Connors, head of research at 3iQ, we are potentially in the sweet spot at the moment. The demand for bitcoin cannot be met by increasing production.”

This year, Connor’s firm has set a price target of between $160,000 and $180,000 for bitcoin. The company anticipates achieving an eye-popping revenue target of $350,000 to $450,000 per coin next year.

SEE ALSO:

A Nationwide AT&T Outage Is Being Investigated By The NY AG