Crypto investment firm Galaxy Digital says a major bullish catalyst is on the horizon for Bitcoin (BTC) as accumulation soars.
However, in a recent blog post, the investment firm also says that a potential bearish event is looming.
“Two major supply events are looming ahead, one bullish and one potentially bearish.”
According to Galaxy Digital, the bullish catalyst is the fourth Bitcoin halving event scheduled for April 2024. Halving events take place every four years and reduce the amount of new BTC entering the market. Historically, the supply adjustment has coincided with significant bullish movements in the price of Bitcoin.
“The next Bitcoin halving (projected for April 2024) will bring the network inflation rate below 1% with approximately 450 new bitcoins being mined per day. Historically, Bitcoin’s three previous halvings (2012, 2016, 2020) have been noted as catalyzing subsequent bull runs, as existing demand quickly surpassed the troughs of new supply…
The 2024 halving should remain in the spotlight for the simple reason that bitcoin’s inflation rate falling below 1% will put it among the hardest existing assets known to mankind, below the historical store of value assets such as gold and silver.
Galaxy Digital is also seeing another uptrend of increasing Bitcoin accumulation.
“On-chain data suggests a continued accumulation of Bitcoin. The total number of addresses with a non-zero balance continues to skyrocket. More than 45 million addresses have BTC. A large number of addresses have received Bitcoin exclusively, never spent. The number of so-called ‘address hoarding’ has skyrocketed in the last month.”
The potential trigger for the bear market is the possibility that a large amount of Bitcoin from the bankrupt and defunct crypto exchange Mt. Gox could flood the market as it is transferred to creditors. However, Galaxy Digital says that this seems unlikely.
“As a result of the 2014 exchange hack, the Mt. Gox bankruptcy trustee has 141,686 BTC plus cash and BCH according to September 2019 documents. Based on our investigation and discussions with Gox creditors, we do not expect an event of material supply for BTC as a result of distributions to creditors.”
Bitcoin is trading at $28,287 at the time of writing, up 3.2% in the last 24 hours.
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Featured Image: Shutterstock/Tithi Luadthong
