Bitcoin Faces Potential Supply Shock Amid Institutional Demand

According to Cointelegraph, Bitcoin is poised to enter a period of supply shock, which could lead to significant price changes compared to previous cycles. Katalin Tischhauser, head of research at digital asset banking group Sygnum, highlighted the potential impact of large demand on Bitcoin's market capitalization. She explained that every dollar of demand could result in an additional $20-30 in market capitalization, a phenomenon observed following the launch of Bitcoin spot ETFs and during the U.S. elections. Tischhauser pointed to the limited liquid supply of Bitcoin relative to the substantial pools of institutional capital on the demand side as a factor that could drive BTC prices higher in the coming months. She noted that the liquid supply has been decreasing steadily over the past 18 months, partly due to the rise of Bitcoin acquisition vehicles like Strategy and Twenty One Capital. Structural factors such as increased regulatory clarity, macroeconomic pressures, and Bitcoin's appeal as a deflationary asset also contribute to a bullish outlook for BTC. Bitcoin exchange-traded funds (ETFs) have experienced minimal outflows, with only four days of outflows since April 16. Nick Forster, founder of Derive, shared insights with Cointelegraph, suggesting that Bitcoin might undergo a "phase of consolidation," which he described as a "healthy pause." This pause would provide the market with time to absorb recent gains and prepare for the next phase of growth. Some analysts are predicting much higher price targets for Bitcoin, ranging from $200,000 to $300,000, indicating optimism about its future trajectory.