Donald Trump’s victory in the US presidential election may have created a favorable backdrop for Bitcoin’s growth. However, this factor is not the main driver of the current BTC rally.
According to Onramp Bitcoin co-founder Jesse Myers, the real reason for the latest price increase is lies in the consequences of the April halving.
Main reasons for BTC growth
In a recent post on X (formerly Twitter), Myers noted that demand for Bitcoin has increased due to Trump’s re-election. Many believe that the politician will pursue a crypto-friendly course.
However, this is not the only factor pushing BTC. According to Myers, the biggest impact on the price of Bitcoin is the halving.
Halving is a planned reduction in the reward of miners for a mined block. The event occurs on the Bitcoin network every four years. The last halving took place on April 20, 2024 – the block reward was reduced from 6.25 BTC to 3.125 BTC.
BTC halvings and demand for bitcoin. Source: X/Jesse Myers
After the halving, there was a shortage of supply in the market. Current Bitcoin mining volumes are unable to meet growing demand. To restore balance, the price of BTC must rise even more.
The same story was observed after halvings in 2012, 2016 and 2020, the expert added.
Growing institutional interest and supply shortages
This year, the attention of institutional investors to Bitcoin has increased significantly. In particular, after the launch of spot exchange-traded funds (ETFs) based on BTC in the United States. This has widened the gap between supply and demand.
Thus, according to the results of November 11, the number of bitcoins purchased by ETF issuing companies amounted to 13,940 coins. At the same time, miners only mined 450 BTC that day.
The total supply of Bitcoin is 21 million coins. It is noteworthy that 94% of all BTC have already been mined or are lost forever. This means that there are only 1.2 million BTC left in the world. In the future, this will further increase the supply shortage and increase the value of the asset, experts say.
At the time of writing, Bitcoin is trading at $87,248. According to CoinGeckoover the past 24 hours the price of BTC has increased by 6%, and over the week – by 26.7%. Previously, the cryptocurrency overtook silver in the ranking of the largest assets in the market by capitalization. The asset figure is $1.7 trillion.
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Source: Cryptocurrency
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