Supply Dynamics May Enhance Bitcoin’s Price in 2024

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Last Updated on December 3, 2023 by Bitfinsider

Grayscale Investments said Friday in a research report that Bitcoin supply dynamics may result in reduced liquid supply early next year, coinciding with the potential approval of spot bitcoin ETF filings, adding that the dynamic could have a positive impact on the digital asset’s valuation.

“Bitcoin’s supply is relatively tight ahead of potential investor inflows into spot ETF products in the U.S.,” Grayscale said, saying that a major amount of bitcoin is owned by entities that may be slow to sell into an appreciated market. The asset management is one of more than a dozen firms seeking Securities and Exchange Commission certification for a spot bitcoin product.

According to the research, next year’s bitcoin halving could also limit the increase of new BTC supply. “This combination of inelastic bitcoin supply and potential new investor inflows should be positive for valuations, in our view,” Grayscale said in a statement.

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