Bitcoin Soaring: Trump Is Not The Only Reason

Bitcoin is making a spectacular breakthrough. While Donald Trump’s victory in the American presidential elections was a focal point, it would be overly simplistic to believe that this single event is fueling the soaring rise of the first crypto. The history is much more complex, and other, much more subtle factors lie behind this trend.

A post-halving Bitcoin supply shock: the hidden mechanics

Jesse Myers, co-founder of Onramp Bitcoin, sought to clarify a crucial point: Trump, while interesting, is not the centerpiece of the puzzle.

To understand the rise of Bitcoin, we must go back to April, the time when the much-feared halving took place.

This event, which halves the miners’ reward for each block, reduced the remuneration from 6.25 BTC to 3.125 BTC. The result? Supply pressure has built up, creating an imbalance where demand is starting to far exceed supply.

For Myers, the equation is simple: fewer bitcoins are produced, and yet, the appetite for the asset has never been so voracious.

“The main story is that we are facing a major supply shock,” he states. In this context, prices must necessarily rise to restore balance. It’s like trying to buy ice cream during a heatwave: everyone wants it, but there isn’t enough. Do you see the picture?

The ETF effect and market psychology

Bitcoin exchange-traded funds (ETFs), introduced at the beginning of the year, have exacerbated this supply pressure.

On November 11 alone, about 13,940 BTC were purchased by ETFs in the United States, while only 450 BTC were mined. This frenzy creates a snowball effect, where rising prices attract more buyers, amplifying demand and leading to almost hysterical behavior in the market.

Myers sums up the situation well: “This is how this dynamic works, leading to predictable bubbles after each halving. “

Scarcity also plays a central role. Currently, 94% of existing bitcoins are already in circulation or lost, leaving a mere 1.2 million BTC to mine.

This limited supply fuels bullish forecasts. On-chain analyst James Check even emphasizes that, compared to gold, bitcoin is absolutely scarce, with no possibility for accelerated production or massive recycling.

Iconic figures like Anthony Scaramucci echo the same sentiment: “You think you missed the train, but you didn’t. We are only at the beginning.” This confidence resonates with state strategies that may soon establish strategic bitcoin reserves, creating a domino effect among institutions and asset managers.

If Trump catalyzed a moment of curiosity, it is the well-oiled mechanism of the crypto market, marked by its scarcity and supply shocks, that is driving Bitcoin. Between the post-halving mechanics and the dynamics introduced by ETFs, bitcoin seems destined to reach new heights. For those who think the wave has passed, it would be wise to reconsider their position: the tide is only rising.