CryptoQuant reveals diminished impact of Bitcoin halving on prices; demand emerges as primary catalyst

Crypto analytics firm CryptoQuant has released a research report suggesting that the upcoming Bitcoin halving will not have as significant an impact on Bitcoin’s price as many investors expect. The report argues that the effect of the halving has been diminishing, as the new issuance of Bitcoin becomes smaller relative to the amount sold by long-term holders. Instead, the key driver of Bitcoin’s price following the halving will be the increase in demand from investors with significant holdings of Bitcoin. The report notes that demand from whales holding between 1,000 and 10,000 Bitcoin has reached its highest ever level, with 11% month-on-month growth. This increase in demand from long-term holders, combined with a monthly supply deficit, suggests that the halving’s effect on Bitcoin’s price might not be as powerful as in the past. The report also highlights that long-term holders are accumulating about seven times more Bitcoin per month than the new Bitcoin entering circulation. Additionally, the total issuance of Bitcoin has decreased to only 4% of the total available supply, a much smaller proportion compared to previous halvings. Despite these findings, other indicators suggest that investors remain optimistic about the upcoming halving, with Open Interest in Bitcoin reaching $78.36 billion, 30 times higher than before the previous halving in May 2020.