Bitcoin (BTC) price surpassed the $108,000 mark this week (now retracing), and analyst Willy Woo has stated that the market is facing a new supply shock.
In a post on social media site X, Woo stated:
According to Woo, the other two significant crashes occurred in 2012 and 2020, preceding strong waves of appreciation in the digital currency. He believes that the current scenario marks the beginning of a new and substantial price rise, with the asset attracting even more interest from investors and institutions.
A Bitcoin supply shock occurs when there is a reduction in the amount of BTC available for sale on the market. This usually happens due to accumulation by large investors or the decision of “hodlers” to hold their coins, reducing the circulating volume.
Since Bitcoin is capped at 21 million units, any reduction in the available supply intensifies its scarcity. Basic economic theory explains that with reduced supply and constant or increasing demand, the price tends to rise.
In this context, Woo predicts that this new shock could take Bitcoin to new levels of appreciation, especially with the entry of institutions and governments into the market.
Bitcoin in the sights of governments
The analyst noted that companies are copying the strategy of MicroStrategy, a software giant that holds 439,000 BTC in reserves. The company recently entered the Nasdaq 100, consolidating itself as the largest corporate holder of Bitcoin in the world.
Additionally, Woo warned that governments could be quietly accumulating Bitcoin, with emphasis on the United States. President-elect Donald Trump has already expressed interest in turning Bitcoin confiscations into strategic reserve assets.
In the US, there is still a bill for the purchase of 1 million BTC. This move is already inspiring similar proposals in other countries, including Brazil, increasing the pressure on the supply of the digital currency.
Combining the supply shock and rising institutional demand, Woo sees the market entering a dynamic similar to those of 2012 and 2020, when the amount of Bitcoin available on exchanges declined while demand soared.
Expert projections indicate that the peak of the current cycle could occur in 2025, with prices between $140,000 and $250,000. Firms such as Bitwise and Bitcoin Suisse suggest that in the event of a supercycle, the price could reach even higher levels.
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