Grayscale: Bitcoin ETF may change the supply and demand ratio, offset the selling pressure of miners after the halving and be beneficial to the price

According to an analysis report by asset management firm Grayscale, fundamental changes in the supply and demand balance of Bitcoin may have a greater impact on the price of the cryptocurrency, especially the upcoming halving event. Historically, halving events are often followed by cycles of rising prices. However, a new factor, namely ETFs, will also impact Bitcoin’s performance during this April’s halving event. “In addition to overall positive on-chain fundamentals, Bitcoin’s market structure is favorable for price post-halving,” the report states. The Grayscale report states that the current issuance of new coins (mining rewards) per block is 6.25 Bitcoins, which is approximately $14 billion per year based on a price of $43,000. In other words, to maintain current prices, $14 billion worth of buying pressure would need to be generated over the same period. “After the halving, these demands will be reduced by half: new coins are issued per block to 3.125 Bitcoins, which is equivalent to reducing to $7 billion per year, effectively reducing selling pressure.” After the halving, the mining reward per block will be reduced to 3.125 Bitcoins. In order to cope with the cost pressure, miners will usually sell more Bitcoin stocks, thereby increasing supply and driving down the price. Grayscale said Wall Street’s recent launch of nine Bitcoin spot ETF products may “serve as a hedge against miner selling pressure.” The report stated: “Bitcoin ETFs could significantly absorb selling pressure, potentially reshaping Bitcoin’s market structure by providing a stable source of new demand, which would be beneficial to the price.” (Cointelegraph)