Bitcoin’s scarcity set to outpace gold post-halving, Bybit analysis reveals.
Bybit released a report revealing that exchanges are projected to run out of Bitcoin (BTC) within nine months at the current withdrawal rate. This forecast is linked to the upcoming Bitcoin halving, which will slash the new supply produced on each block by 50%.
The report notes a faster depletion of Bitcoin reserves on centralized exchanges, with only 2 million BTC remaining. Daily inflows of $500 million to spot Bitcoin exchange-traded funds (ETFs) could lead to a daily withdrawal of 7,142 BTC from exchange reserves, depleting them within nine months.
“Each Bitcoin halving sharpens the narrative of Bitcoin as not just a currency, but a scarce digital asset, akin to digital gold,” said Ben Joe, co-Founder and CEO of Bybit. “This upcoming halving in 2024 will thrust Bitcoin into an era of unprecedented scarcity, making it twice as rare as gold.”
Moreover, Bybit’s report mentions the Stock-to-Flow (S2F) ratio, which measures scarcity by dividing the circulating supply by annual production. Bitcoin’s S2F ratio of 56 is set to double to 112 post-halving, in contrast to gold’s 60, underscoring Bitcoin’s increasing scarcity. Institutional investors, especially in the US with the approval of spot Bitcoin ETFs, are strategically positioning for this scarcity.
S2F chart. Image: Bybit/PlanB
The report also discusses the expected post-halving effects, including a potential hash rate increase and higher production costs for miners, which could lead to a sell-off of reserves by unprofitable miners and a consequent reduction in sell-side supply to exchanges.
Nonetheless, the supply cut might trigger a ‘fear of missing out’ sentiment among new investors, propelling Bitcoin’s price to new all-time highs.