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Bitcoin Supply Shock Could Amplify Price in Coming Months, Says Sygnum

A stylized graphic displaying Bitcoin symbols with arrows indicating upward price movement and vibrant colour schemes.

Bitcoin may soon experience a supply shock capable of driving prices significantly higher, according to Sygnum’s Katalin Tischhauser. A declining liquid supply combined with institutional demand is noted as a crucial factor. Despite recent gains, a consolidation phase is expected, with some analysts predicting prices might reach between $200,000 and $300,000. However, a shift in retail investment habits towards institutional entities raises questions about Bitcoin’s future trajectory.

Bitcoin is reportedly on the verge of experiencing a significant ‘supply shock’ that could have more pronounced effects on its price than during previous cycles. Katalin Tischhauser, who heads research at Sygnum, a digital asset banking group, shared these insights with Cointelegraph. She explained that strong demand could lead to a substantial uptick in market value, citing a multiplier effect where every dollar of demand could potentially generate an additional $20 to $30 in market capitalisation.

Tischhauser points to the diminished liquid supply of Bitcoin (BTC) in relation to the influx of institutional capital as a key driver of a potential price surge in the coming months. The liquid supply of Bitcoin has been on a downward trend for the past 18 months, influenced by an increase in Bitcoin acquisition vehicles from various firms such as Strategy and Twenty One Capital.

Moreover, she highlighted structural factors contributing to her optimistic outlook for Bitcoin’s future, including improved regulatory clarity, macroeconomic challenges, and Bitcoin’s rising status as a deflationary asset. Interestingly, exchange-traded funds (ETFs) for Bitcoin have experienced just four days of outflows since mid-April, which might suggest sustained interest in the asset.

Adding further context, Nick Forster, founder of Derive, mentioned that Bitcoin is now entering what he calls a “phase of consolidation.” He described this as a “healthy pause” for the asset. This period will enable the market to digest the latest gains before gearing up for the following phase of price movement. Analysts are making bold predictions regarding future price points, suggesting targets that could stretch as high as $200,000 to $300,000.

However, it’s worth noting some caution as well—with the retail sector seeming to shift away from Bitcoin towards institutional players, as highlighted by Sky Wee. This retreat of retail investment could signify a pivotal moment as Bitcoin’s appeal evolves amid changing market dynamics. And while the optimism surrounding Bitcoin continues to swell, the landscape is certainly worth monitoring closely.

Marcus Collins is a prominent investigative journalist who has spent the last 15 years uncovering corruption and social injustices. Raised in Atlanta, he attended Morehouse College, where he cultivated his passion for storytelling and advocacy. His work has appeared in leading publications and has led to significant policy changes. Known for his tenacity and deep ethical standards, Marcus continues to inspire upcoming journalists through workshops and mentorship programs across the country.

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