This year, the enormous global demand for Bitcoin combined with macroeconomic considerations will have a far greater impact on its price. According to several industry observers, the April halving of BTC at $70,721 will just be a minor factor in the cryptocurrency’s potential for extraordinary growth this year.
Investment researcher Lyn Alden told Cointelegraph that the BTC halving next month will lower daily BTC output from the present average daily amount of 900 BTC by around 450 BTC. Alden said that the daily fiat inflows and outflows from Bitcoin exchange-traded funds (ETFs) and cryptocurrency exchanges dwarf the amount of supply reduction.
Alden Says Bitcoin Exchange Value Can Easily Exceed 10x
Alden stated that overall demand for BTC is a “bigger factor than tightening supply” and that “in fact, inflows or outflows can easily exceed 10x of that value.” Referring to a graphic showing the price of Bitcoin vs the worldwide monetary supply (M2), Alden emphasized that historically, demand for the cryptocurrency has been more connected with indicators of global liquidity, such as the global broad money supply. “Thus, while I believe the halving to be significant, it’s but one element among several that impacts the incidence and timing of a bull market. A greater role is played by HODL waves, other triggers, and different indicators of global liquidity, according to Alden.
