Bitcoin (BTC) will become rarer every time the halving event occurs, and the event will take place in four days and it will make the crypto asset twice as rare as gold, according to analysts at leading crypto exchange Bybit.
A report on what to expect before and after the Bitcoin halving revealed that BTC will experience a reduction in supply after the event, as reserves on all centralized exchanges may run out within nine months.
Bybit said Bitcoin's stock-to-flow (S2F) model supports its claim because those metrics have shown that BTC becomes scarcer than gold after each halving. The S2F ratio is calculated by renewing the circulating supply of a commodity with its annual production.
At the time of writing, Bitcoin's S2F ratio is around 56, while gold is 60. After the halving, it is expected that Bitcoin's ratio will be to 112.
Halving reduces the supply by reducing the production rate of BTC, and supply halving may be inevitable. Bitcoin is already starting to see early signs of reduced supply, which will only get worse after the halving.
The supply of BTC for spot Bitcoin trading funds usually comes from centralized exchanges when investors realize their profit positions and miners sell their block rewards. When mining rewards are reduced and investors HODL their assets in cold wallets or decentralized wallets, miners will refrain from selling quickly, and the supply of sales going into exchanges will decrease.
Currently, about two million Bitcoins are in the custody of centralized exchange exchanges. Assuming a daily inflow of the spot Bitcoin ETF of $500 million, approximately 7,142 BTC will be involved in the exchange each day, indicating that the savings will only last nine months after the halving.
Although halvings often trigger bitcoin price increases, analysts see this cycle as complex and are still uncertain about the impact of this upcoming halving as BTC has already set new records. Some believe that the rise after the halving will be less pronounced than the market has experienced after previous events.
Nevertheless, market experts believe demand will drive BTC's surge after this halving when spot Bitcoin ETFs reach their full potential.
