Bybit, a leading cryptocurrency exchange, has published a revealing report projecting a severe Bitcoin (BITCOMP) supply constraint on exchanges over the next nine months, driven by the anticipated 2024 Bitcoin halving event.

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This event, which slashes Bitcoin mining rewards by half, is poised to dramatically decrease the available supply of Bitcoin, intensifying its scarcity.

Bybit report says BTC reserves are falling

The report indicates that only 2 million bitcoins remain in the reserves of centralized exchanges globally.

With a daily inflow average of $500 million to Bitcoin Spot Exchange-Traded Funds, approximately 7,142 bitcoins are expected to be withdrawn from exchanges daily.

At this rate, all remaining reserves could be depleted in just nine months, signaling a potential spike in Bitcoin’s market value due to increased scarcity.

Bybit’s analysis highlights the Stock-to-Flow (S2F) ratio, a metric used to assess the scarcity of a commodity by comparing its current circulation to its yearly production.

Pre-halving, Bitcoin’s S2F ratio stands at 56, close to that of gold, which is 60. Post-halving, this ratio for Bitcoin is expected to soar to 112, making it significantly rarer than gold and enhancing its appeal as a ‘digital gold’.

Ben Zhou, Co-Founder and CEO of Bybit, says

This upcoming halving will not only reduce Bitcoin supply but elevate its status among digital assets, akin to gold. This scarcity reinforces Bitcoin’s value proposition, especially in the eyes of institutional investors who have increasingly embraced Bitcoin following the U.S. approval of Bitcoin Spot ETFs.

The report also notes that the price correlation between Bitcoin and other cryptocurrencies remains high, suggesting that Bitcoin continues to be a bellwether for the broader crypto market.

When is Bitcoin halving?

Bitcoin halving is likely scheduled for the night between April 19th and 20th.

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