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Bitcoin Consolidates amid Growing Adoption and Supply ShortageDownloadSubscribe
Bitcoin Consolidates amid Growing Adoption and Supply Shortage

Bitcoin Consolidates amid Growing Adoption and Supply Shortage

Bitcoin’s price fell by 30% since November 2021’s all-time high, but some experts say that BTC’s bull run isn’t over. According to certain indicators, Bitcoin is in consolidation mode while gathering steam towards an inevitable $100,000 price point in the future.

With only 10% bitcoins left to be mined plus growing mainstream adoption and awareness, the view is that Bitcoin’s fixed supply will eventually lead to diminished volatility and a steady price increase over time.


A Sound, Predictable and Unchangeable Monetary Policy

Twelve years after the first Bitcoin was mined, data from Blockchain.com indicates that as of Monday, December 13, 2021, 90% of all bitcoins have been mined out.

The miner of block #714,032 at 23:26 UTC was awarded 6.25 BTC, increasing the circulating supply of Bitcoin to 18.9 million. Consequently, there is only 10% left of the total supply of 21 million bitcoins remaining to be mined.

However, the process of mining the final 10% bitcoins could go on until at least February 2140, according to the Bitcoin network’s halving schedules. Bitcoin Halving is a scheduled inflationary control procedure that cuts the reward for mining BTC in half about every four years.

Bitcoin, a peer-to-peer (P2P) digital currency, runs on a sound, predictable and unchangeable monetary policy. Unlike Fiat currency, whose monetary policy and supply can be altered by the decisions of a select group of people, Bitcoin runs on a network of “rules without rulers,” meaning no one has the power to inflate or reduce its supply.

Bitcoin may also never attain its 21 million supply limit due to several factors. Besides the caveat by Bitcoin inventor Satoshi Nakamoto stipulating that 50 BTC in the Genesis block cannot be spent, at least another 3.7 million BTC has been deemed already “lost” or technically inaccessible.


Institutions and Governments could Trigger the Next FOMO

Today, still only a tiny percentage of people in society completely understand what Bitcoin is, including how it works and its full potential. Yet, the considerable number of emerging use cases for BTC is starting to demonstrate its value to a broader audience.

Bitcoin notably empowers regular citizens in countries like Palestine or Cuba, where war and totalitarianism have eroded the value of the local currencies. Bitcoin is also acting as a store of value in select countries such as Venezuela and Turkey, where high inflation has been eroding purchasing power.

A recent Bloomberg Intelligence report stated that the price corrections Bitcoin experienced this year has only made it a stronger asset and its bull market even healthier. Predicting that the fixed supply will sustain increased prices, the report stated:

“Bitcoin appears to be on a trajectory for $100,000. We see it as more of a question of time, notably due to the economic basics of increasing demand vs. decreasing supply.”

Increased mainstream adoption, the development of new exchange-traded funds (ETFs), and Bitcoin’s legal tender status in El Salvador are just some factors increasing further demand for Bitcoin. A new FOMO could ensue once the scarcity bug bites governments, institutions and high net worth individuals.

Currently, the U.S. is mulling on greater regulation as the country appears primed to embrace cryptocurrencies, bolstered by an increasing acceptance among institutional investors. The introduction of more detailed legislation will only benefit Bitcoin as it is likely to create more understanding and interest, and a higher demand for BTC.

This content is for informational purposes only and is not investment advice. You should consult a qualified licensed advisor before engaging in any transaction.

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