According to a recent report by CryptoQuant, the impact of the Bitcoin halving on its price may not be as significant as many investors expect.
The diminishing effect of the halving is attributed to the decreasing new issuance of Bitcoin relative to the selling activity of long-term holders.
Instead, the “key driver” influencing Bitcoin’s price post-halving will likely be the increase in demand from whales holding significant amounts of Bitcoin, particularly those with holdings between 1,000 and 10,000. This demand from whales has been steadily increasing, potentially contributing to a positive price trend for Bitcoin.
In the past, when Bitcoin’s supply decreased due to halving events, its price tended to go up because demand outpaced the reduced supply. But between 2021 and 2023, there were times when the demand from long-term holders was higher than the new supply entering the market.
Now, the gap between demand and supply is even wider, suggesting that the halving might not impact prices as much as before.
Long-term holders are now accumulating about seven times more Bitcoin each month than the amount being newly issued.
“Permanent holders are adding as much as 200K Bitcoin per month to their balances, much more than the ~28K Bitcoin issuance. Bitcoin monthly issuance will decrease to ~14K after the halving,” CryptoQuant stated.
Additionally, the total issuance of Bitcoin has decreased to only 4% of the total available supply, which is much lower than before previous Bitcoin halving events. Before the first, second, and third halvings, issuance represented 69%, 27%, and 10% of the total available supply, respectively.
Also Read: Bitcoin Halving Could be a ‘Sell-the-news’ Trend for Months
