In a notable turn of events, the demand for Bitcoin from long-term holders has exceeded the issuance levels of the cryptocurrency for the first time in its history, as revealed by analysts at CryptoQuant.
According to a recent research report by CryptoQuant, the cohort of long-term holders is currently acquiring approximately 200,000 BTC per month. This figure notably surpasses the monthly issuance rate, which stands at around 28,000 BTC.
Analysts at CryptoQuant emphasized the significance of this trend, particularly in light of the impending halving event, which is expected to reduce monthly issuance to approximately 14,000 BTC. The observed surge in demand represents a noteworthy shift in Bitcoin‘s supply-demand dynamics.
Tezos co-founder Arthur Breitman weighed in on the upcoming halving, characterizing it as a “reduction in security budget.” Breitman suggested that while the alteration in mining rewards could potentially address concerns of overpayment for security in the short term, it underscores the necessity for future adjustments to emission policies to maintain network security.
However, opinions within the crypto sphere diverge on the implications of the halving. Former BitMEX head Arthur Hayes anticipates potential price declines before and after the event, citing limited dollar liquidity during this period. Conversely, Marathon CEO Fred Thiel believes that the halving’s impact may already be factored into the market, pointing to successful spot exchange-traded fund (ETF) approvals.
As the countdown to reduced mining rewards continues, the upcoming halving in mid-April will see mining rewards halved from 6.25 to 3.125 BTC per block. This process is automated, with the Bitcoin network protocol adjusting itself upon reaching a predefined block height. It is projected that all 21 million BTC will be mined around 2140, after which miners will rely solely on transaction fees for rewards.
