Samson Mow, CEO of JAN3 and noted Bitcoin enthusiast, is convinced that we are about to witness an extraordinary event in the cryptocurrency market. According to him, an imminent supply shock could catapult the price of Bitcoin to an unprecedented level of US$1 million, potentially “in days or weeks”.
This bold prediction is based on a combination of recent factors, including the approval of Bitcoin ETFs and ongoing market adjustments. The launch of these ETFs has already generated billion-dollar trading volume, and BlackRock's acquisition of 11.500 BTC has had a notable impact, significantly reducing the available supply. This purchase represents an acquisition equivalent to 13 days of the daily supply of Bitcoin, which is around 900 BTC.
Experts are predicting an exponential increase in demand for Bitcoin, especially if ETFs continue to attract substantial investments. A CryptoSlate analysis of the available BTC supply suggests that, at the current rate of institutional purchases, supply could dry up in approximately 120 days. This would make Bitcoin more scarce than ever.
Furthermore, the next Bitcoin Halving event, which historically significantly affects the price by slowing the rate of new BTC generated, is approaching. The reward for mining new blocks will be halved, dropping from 6,25 BTC to 3,125 BTC. This reduction, expected to occur within 90 to 120 days, combined with growing demand, could lead to an unprecedented price increase.
Mow adopts the “maximum pain theory,” an idea borrowed from traditional financial markets, to explain Bitcoin’s movements. This theory suggests that price movements could cause the maximum financial loss for the greatest number of market participants. In the context of Bitcoin, this could result in rapid and extreme price fluctuations, surprising many traders and investors.
Mow also highlighted possible consequences of a rapid increase to $1 million. These include impacts on the strategies of nation-states and companies, an effect on the usability of the Lightning Network, and even a possible invalidation of the Stock-to-Flow (S2F) model often used to predict the value of Bitcoin.
At the time of publication, the Bitcoin price it was quoted at US$42.373,31 with a drop of 1,2% in the last 24 hours.
