Bitcoin’s four-year halving cycle is alive and well.

The bull market has just begun. And this time could be more epic than any previous cycle.

While the reduction of oncoming supply alone tends to increase prices, there are many additional converging catalysts this time around.

These include:

  • Holders taking self-custody of their coins in record numbers
  • Coins staying inactive
  • Hash rate reaching record highs
  • Potential spot ETF approval in the USA
  • Nation-state adoption

Let’s look at each of these in some detail.

Supply held on exchanges at record lows

The number of coins held on exchanges sits at record lows today. This indicates that many people have no intention of selling anytime soon.

This, of course, puts a floor under the Bitcoin price. It also signals a broad bullish sentiment.

Bitcoin inactive supply at record highs

While the supply of BTC held on exchanges remains low, another important metric has also hit a record high.

A large portion of the BTC supply has not moved for over one year. An increasing number of people have begun saving in Bitcoin.

Not spending it or speculating with it. Simply holding it as a form of savings.

If this trend stays the same or continues, it will become harder and harder for anyone to buy Bitcoin. Prices then must rise to meet demand.

Hash rate reaches new record highs

Another bullish network signal is the hash rate.

A record hash rate means the Bitcoin network has become more secure than ever.

Some have speculated that at least part of the reason for this rise has to do with institutions like Blackrock front-running their ETF approvals. Acquiring coins through miners could be a way to stack sats without moving the market, or so goes the logic.

Spot ETF approval imminent

This one doesn’t require much explaining.

Anyone following the Bitcoin space in any capacity already knows the story.

Blackrock, Fidelity, Charles Schwab, VanEck, and many others have filed applications with the SEC for a spot Bitcoin ETF. Some have speculated these ETFs could be approved as soon as January 10, 2024.

Nation-state adoption, Argentinian elections

Amid soaring inflation, Argentina has elected a pro-Bitcoin president.

Will he take his country down the same path that Nayib Bukele has taken El Salvador on?

This remains to be seen. Still, this is a bullish development.

With corporations like MicroStrategy stacking huge amounts of Bitcoin, and nations like El Salvador also adding to their holdings on a regular basis, the supply of coins available continues to diminish.

This reduction in supply, compounded by the halving next year, is set to meet a tsunami of demand from multiple sources: institutional, national, and retail.

Even as I write this, Bitcoin is up 150% YTD and hit a new yearly high over the weekend.

Over the next 1 – 2 years, we will see new record highs in Bitcoin, and the magnitude of the face-ripping rally will shock even the most bullish Bitcoiners.

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