What's next for bitcoin after supply drain?

bryant.coleman

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Quote from: zanezane on January 09, 2021, 01:27:53 AM

As the title says, what happens. As the supply goes lower, the prices/demand go up but what happens when the supply is drained? Will we ever reach a price ceiling or the prices will still go up? I do not know any other question that I can think of but if you have one, feel free to reply on this thread if you have other questions.

Unlike the case with equities or mutual funds, the Bitcoin exchange rates are almost purely dependent on the supply-demand situation. If the supply and demand are in some sort of equilibrium, then the prices will remain stable. When the supply gets squeezed, the prices will go up and the rally will stop only when the demand from buyers will go below the level of that from the sellers.

Look at the markets now. The prices have now stabilized, because most of those who were planning to purchase BTC have already done so. Now the pressure is on sellers, as they have become the more numerous group.

blckhawk

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Quote from: zanezane on January 09, 2021, 01:27:53 AM

As the title says, what happens. As the supply goes lower, the prices/demand go up but what happens when the supply is drained? Will we ever reach a price ceiling or the prices will still go up? I do not know any other question that I can think of but if you have one, feel free to reply on this thread if you have other questions.

No, I don't think the supply will be drained no matter what happened because no one will hold their stash for a long time, yeah there could be people pull it off but not entirely. Most of the holders will sell their stash once they have met their target price, there's no way they hold for a long time because once they say how enormous profit they can get out of it they will definitely sell even if they are whales or large institutions. To put it simply there will be a circulation will happen. Hypothetically, if the supply has been capped, I'd say that it would be a trouble.

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Quote from: adaseb on January 24, 2021, 01:27:50 AM

The higher the price will go there will be more people willing to sell... the same is true if price goes down way too low. Look how much panic was created when it broke $30K to the downside, many people including some large institutions got scared and sold their BTC.

Large institutions? Who?

The only thing I read about institutions selling was this press release from NexTech, some small unprofitable penny stock company: https://www.globenewswire.com/news-release/2021/01/22/2162801/0/en/NexTech-Sells-Its-Treasury-Bitcoin-Holdings-and-Books-a-Profit.html

They sold because of the double spend FUD. But they only had 130 BTC to sell.....

adaseb

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The higher the price will go there will be more people willing to sell... the same is true if price goes down way too low. Look how much panic was created when it broke $30K to the downside, many people including some large institutions got scared and sold their BTC.

Another thing to consider is the speed at which it goes up. If Bitcoin goes up faster then there will be less supply rather than it going up slower. I am sure there are people who will be impatient and just sell whatever the price is, hence more supply entering the market. However if it goes up and up everyday most people will hold and see how high it can go before it starts to correct.

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Quote from: zanezane on January 10, 2021, 07:33:11 PM

Quote from: Russlenat on January 10, 2021, 07:08:36 AM

Supply will remain the same, unless those holders will forget how to access their bitcoin and that bitcoins will be lost in circulation. Have to understand that though whales are holding huge bitcoin, they are also waiting at the right time to sell, so supply will still circulate and we will see a different scenario which are bearish and bullish.

How so? @NeuroticFish did a job of listing possible scenarios so his/her point can be more valid. I think I did not ask about supply, I know that supply will remain the same. If there is no one selling and a lot wanting to buy, what do you think will happen.

We are talking about literally everyone selling their coins end up selling it, and everyone who wants to buy and hold and never sell end up buying as much as available in the market. In that scenario there are no people who want to sell their bitcoins, and people who want to buy bitcoin can't find anyone who sells it because of this, so there is no more supply anywhere. Are we really sure that we could reach to that level?

I mean sure we could have less supply, hell we have less supply right now in the market going around then we used to even after so many bitcoins were mined, why? Because big companies ended up buying so many coins. However there is a huge difference between being out of supply versus just having a little amount of bitcoin and I believe there will always be at least 1 million bitcoins in the market that will be traded by people.

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Quote from: zanezane on January 09, 2021, 01:27:53 AM

As the title says, what happens. As the supply goes lower, the prices/demand go up but what happens when the supply is drained? Will we ever reach a price ceiling or the prices will still go up? I do not know any other question that I can think of but if you have one, feel free to reply on this thread if you have other questions.

I doubt supply would be drained completely, but supply at certain prices gets drained and that is why the price goes up, so we are seeing it live for the past few months. Obviously speaking we are not going to have a situation where there is zero supply, there will always be some people selling bitcoin, it will just change price. The less supply in a price, means more supply higher prices, if buyers buy those too, there will be more supply at even higher prices and it will go on like that until price reaches 50k first, then 60k then more and more and more, it will go on like that.

However I believe there will be a moment when supply will be enough, and buyers will buy there and that's it, it is not going to go any higher, it is not unlimited, we can't have 1 billion dollars per bitcoin, we know that, which means it has to stop somewhere, we just don't know where.

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Quote from: Russlenat on January 10, 2021, 07:08:36 AM

Supply will remain the same, unless those holders will forget how to access their bitcoin and that bitcoins will be lost in circulation. Have to understand that though whales are holding huge bitcoin, they are also waiting at the right time to sell, so supply will still circulate and we will see a different scenario which are bearish and bullish.

How so? @NeuroticFish did a job of listing possible scenarios so his/her point can be more valid. I think I did not ask about supply, I know that supply will remain the same. If there is no one selling and a lot wanting to buy, what do you think will happen.

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Supply will remain the same, unless those holders will forget how to access their bitcoin and that bitcoins will be lost in circulation. Have to understand that though whales are holding huge bitcoin, they are also waiting at the right time to sell, so supply will still circulate and we will see a different scenario which are bearish and bullish.

exstasie

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Quote from: adaseb on January 10, 2021, 01:26:22 AM

There is always the dreaded "MtGox Coins being distributed". Its been years but eventually they will be released. When they are released it might cause a short term price decline since there is a huge supply about to hit the market.

Yep, when that finally happens I think it could be a major bearish catalyst. 150,000 BTC is no joke. The gains those holders are sitting on are just massive in % terms, and they're all long term capital gains too. And it's all retail investors, so sellers are likely to send coins to exchanges, directly pressuring down spot prices. So yeah, that's got to represent some sell pressure.

Not to mention all the traders anticipating that sell pressure.

It's been years of civil rehab plans being submitted and resubmitted, so I have no idea what timeline to expect. But if it finally happens in the next 6-12 months, it might be the perfect catalyst to pop the current bubble.

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Quote from: zanezane on January 10, 2021, 12:54:08 AM

until there is no available supply, what happens there?

In that hypotetical situation we would see that:
1. Since nobody buys or sells the price will remain fixed and unused / useless
2. Since the number of transactions will become scarce, miners will receive only the block reward (if any)
3. Since you say that nobody wants to sell, that also means that the miners have nothing to sell (else they'd sell to pay for electricity and such).
4. If miners have nothing to sell, they'll go out of business.
5. Bitcoin network collapses
6. Bitcoin value goes from something untouchable and high to... 0. The End.

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Quote from: pooya87 on January 10, 2021, 02:12:20 AM

Quote from: zanezane on January 10, 2021, 01:33:42 AM

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Yes but that's a very hypothetical question that is far from reality; not to mention that it can happen to anything else in the world. Lets say you wanted to buy a car and nobody including the manufacturer were selling it and only responded with "name your price".

Realistically supply (people willing to sell) and demand (people willing to buy) always reaches an equilibrium even if the balance is disturbed shortly. For example right now there are less supply (less people willing to sell at <$40k) while the demand is increasing so the price keeps going up. Eventually that reaches a point where the balance is reached and price stabilizes (it could be after a bubble burst and bear market but it will eventually happen like the $6k in 2020).

My question is already answered so let me impose another. What happens when we reach that equilibrium? Do you think the whales will try to tip to the balance in their favor when an equilibrium happens?

marcbitcoins

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Quote from: zanezane on January 09, 2021, 01:27:53 AM

As the title says, what happens. As the supply goes lower, the prices/demand go up but what happens when the supply is drained? Will we ever reach a price ceiling or the prices will still go up? I do not know any other question that I can think of but if you have one, feel free to reply on this thread if you have other questions.

You are referring to the maximum supply of 21,000,000 so if this will happen to be depleted in the future then the latest price shall prevail but like the others here I also believe that it will not going to be out of stock because of buy and sell cycle which is natural to all trading investments plus the other feature of Bitcoin which is it can be use on paying goods and services too therefore it is really impossible for this drain thing.

pooya87

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Quote from: zanezane on January 10, 2021, 01:33:42 AM

Quote from: pooya87 on January 10, 2021, 12:59:44 AM

Quote from: zanezane on January 09, 2021, 05:14:49 AM

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Price would remain the same as the last trade that took place before "everyone" decided to hold and never sell.

Finally something in the realm of my question is answered. But wouldn't that make bitcoin become an item that will be on a "name your price" basis because if there are still people looking and someone willing to sell but at a price.

Yes but that's a very hypothetical question that is far from reality; not to mention that it can happen to anything else in the world. Lets say you wanted to buy a car and nobody including the manufacturer were selling it and only responded with "name your price".

Realistically supply (people willing to sell) and demand (people willing to buy) always reaches an equilibrium even if the balance is disturbed shortly. For example right now there are less supply (less people willing to sell at <$40k) while the demand is increasing so the price keeps going up. Eventually that reaches a point where the balance is reached and price stabilizes (it could be after a bubble burst and bear market but it will eventually happen like the $6k in 2020).

zanezane

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Quote from: pooya87 on January 10, 2021, 12:59:44 AM

Quote from: zanezane on January 09, 2021, 05:14:49 AM

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Price would remain the same as the last trade that took place before "everyone" decided to hold and never sell.

Finally something in the realm of my question is answered. But wouldn't that make bitcoin become an item that will be on a "name your price" basis because if there are still people looking and someone willing to sell but at a price.

adaseb

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Almost everybody has an exit price, if BTC hits $100K you think the people who bought at $20K won't sell? Some might keep holding but some will eventually sell. Hence there will always be some supply. Question is will it be smaller than the demand?

There are other events that can occur. Right now everybody wants to keep their BTC to $100K so they aren't selling, however what will happen if suddently there is a huge crash down to $30K, then $20K, then $15K, obviously people will get scared and many will "Put stop-loss at break-even" and the supply will grow.

There is always the dreaded "MtGox Coins being distributed". Its been years but eventually they will be released. When they are released it might cause a short term price decline since there is a huge supply about to hit the market.

pooya87

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Quote from: zanezane on January 09, 2021, 03:59:16 AM

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Well with the current trend of institutional investors buying all they can as much as possible and hodling it as long as possible would be a different case right? Yes there will be people that will be selling it but there will come a time when it will only be a atomic percentage of the supply that they are filling in.

I doubt that institutional investors are going to be higher than regular investors at all with the way bitcoin is, decentralized and "be your own bank" nobody needs a middle man to invest in bitcoin. The actual market will always remain bigger than the institutional ones.
Even with institutional investors, the supply is still liquid through a different channel and nobody is "holding" bitcoin, they are just trading IOUs instead of bitcoin directly.

Quote from: zanezane on January 09, 2021, 05:14:49 AM

Hypothetically everyone holds all the supply of bitcoin and does not plan to sell it, what happens next?

Price would remain the same as the last trade that took place before "everyone" decided to hold and never sell.

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Quote from: NeuroticFish on January 09, 2021, 11:31:28 AM

Quote from: zanezane on January 09, 2021, 01:27:53 AM

As the supply goes lower, the prices/demand go up but what happens when the supply is drained?

As the price rises, some of the people that have bought will now sell.
As the famous quote tells "Everything is for sale if the price is right."
You don't have to worry that the supply will be drained. That would only mean that the offered price is too low.

Also don't forget about market cycles and Bitcoin history. It can do wonders on people's mentality and the prices they're asking for their coins.

All in all you are worrying for something that cannot happen.

This is a hypothetical situation, as there are more individual hodlers that are going to sell and more institutional investors buying those going out of the available supply and hodling it until there is no available supply, what happens there?

NeuroticFish

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Quote from: zanezane on January 09, 2021, 01:27:53 AM

As the supply goes lower, the prices/demand go up but what happens when the supply is drained?

As the price rises, some of the people that have bought will now sell.
As the famous quote tells "Everything is for sale if the price is right."
You don't have to worry that the supply will be drained. That would only mean that the offered price is too low.

Also don't forget about market cycles and Bitcoin history. It can do wonders on people's mentality and the prices they're asking for their coins.

All in all you are worrying for something that cannot happen.

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Quote from: zanezane on January 09, 2021, 05:14:49 AM

Will it reach equilibrium if there is no supply, suppose that it is a free market, wouldn't that mean that anyone hodling would be okay to not sell their bitcoin to prevent a healthy circulation.

You have to understand that the utility of Bitcoin as a currency comes from the fact that is can be exchanged for other goods and services easily. If not, it won't be a currency. Bitcoin is not an investment vehicle where people gain dividends by holding onto it. There has to be a point whereby the demand goes to zero due to the high price and that's when it becomes a bubble and people starts to panic sell.

There is literally no scenario where everyone in the world would want to hold Bitcoins forever without turning it into a bubble.

Quote from: zanezane on January 09, 2021, 05:14:49 AM

If I know when will it happen do you think I would be asking questions? Hypothetically everyone holds all the supply of bitcoin and does not plan to sell it, what happens next?

Tl;dr for everyone else. Bubble bursts, price crashes and everyone loses money.

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Quote from: zanezane on January 09, 2021, 01:27:53 AM

As the title says, what happens. As the supply goes lower, the prices/demand go up but what happens when the supply is drained? Will we ever reach a price ceiling or the prices will still go up? I do not know any other question that I can think of but if you have one, feel free to reply on this thread if you have other questions.

What do you mean by supply being drained? You mean the amount/number of Bitcoin that has been mined? Or shall I reconstruct your question to "what will happen if all supply of Bitcoin has been mined?".
Well, If I assume that's really the question, then I guess it's something that you won't worry about.
Because, first ; I'm a hundred percent sure that during the time all Bitcoin will be mined, you will no longer exist in this world.
Second, Bitcoin is still at the very young phase of it's popularity.
Third; the demand keeps on increasing every year.

So, to make things short. That kind of question cannot be answered at this certain time.

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Quote from: zanezane on January 09, 2021, 01:27:53 AM

As the title says, what happens. As the supply goes lower, the prices/demand go up but what happens when the supply is drained? Will we ever reach a price ceiling or the prices will still go up? I do not know any other question that I can think of but if you have one, feel free to reply on this thread if you have other questions.

We already mined huge amount from the total cap value of bitcoin which means we still have enough supply so the only chance can be the demand will reduce not the supply because whenever the supply decrease the price will increase so if less supply the price of bitcoin is keep going to be increasing.

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Quote from: rodskee on January 09, 2021, 04:48:01 AM

Quote from: zanezane on January 09, 2021, 01:27:53 AM

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Any Idea when would the DRAINING will happen ? and Why has to drain when the supply circulates constantly ? i don't see the reason for the question.

If I know when will it happen do you think I would be asking questions? Hypothetically everyone holds all the supply of bitcoin and does not plan to sell it, what happens next?

Quote from: ranochigo on January 09, 2021, 04:51:41 AM

Quote from: zanezane on January 09, 2021, 03:59:16 AM

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It's a free market. By market forces, the price should reach an equilibrium when the demand is equal to the supply. If somehow the demand overwhelmingly exceeds the supply, then the price will rise. It continues until it reaches an equilibrium. It's simple economics. More demand, same supply = higher price.

It functions on simple economics.

Will it reach equilibrium if there is no supply, suppose that it is a free market, wouldn't that mean that anyone hodling would be okay to not sell their bitcoin to prevent a healthy circulation.

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Quote from: zanezane on January 09, 2021, 03:59:16 AM

Well with the current trend of institutional investors buying all they can as much as possible and hodling it as long as possible would be a different case right? Yes there will be people that will be selling it but there will come a time when it will only be a atomic percentage of the supply that they are filling in.

It's a free market. By market forces, the price should reach an equilibrium when the demand is equal to the supply. If somehow the demand overwhelmingly exceeds the supply, then the price will rise. It continues until it reaches an equilibrium. It's simple economics. More demand, same supply = higher price.

It functions on simple economics.

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Quote from: zanezane on January 09, 2021, 01:27:53 AM

As the title says, what happens. As the supply goes lower, the prices/demand go up but what happens when the supply is drained? Will we ever reach a price ceiling or the prices will still go up? I do not know any other question that I can think of but if you have one, feel free to reply on this thread if you have other questions.

Any Idea when would the DRAINING will happen ? and Why has to drain when the supply circulates constantly ? i don't see the reason for the question.

Quote from: zanezane on January 09, 2021, 03:13:49 AM

If the supply is capped, that means that we will lose all of it to demands eventually right? I think I covered already the part where the price increase because the demand increase.

Demand and supply Will always be there no matter if the supply is capped or not , and remember that there are altcoins and that's what they made for , to Apply their use when the demand for Bitcoin is over , Hope that this will take effect in time , though we are too far from that , the estimate time is 2140 , means more than a hundred years from out time now.

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Quote from: pooya87 on January 09, 2021, 03:26:47 AM

Quote from: zanezane on January 09, 2021, 03:13:49 AM

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No because the "demand" that buys bitcoin is not always going to hold on to it for eternity. At some point people always end up selling their bitcoins one way or another (eg. selling directly to fiat or buying goods where the coins end up on an exchange eventually).

Well with the current trend of institutional investors buying all they can as much as possible and hodling it as long as possible would be a different case right? Yes there will be people that will be selling it but there will come a time when it will only be a atomic percentage of the supply that they are filling in.

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Yes, I agree with the other that the supply is not going to be "drained". If OP means a reduction in offer, we are seeing it already: an increase in price. Also because there is more demand.

As for what happens next, it depends. Is more institutional investors start buying bitcoin and people keep withdrawing bitcoin from exchanges, thus reducing offer, there will be more increases in price but we don't know until what point. At point the price will be enough for people to be more interested in selling and not so interested in buying so the price will go down.

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Quote from: zanezane on January 09, 2021, 03:13:49 AM

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If the supply is capped, that means that we will lose all of it to demands eventually right? I think I covered already the part where the price increase because the demand increase.

No because the "demand" that buys bitcoin is not always going to hold on to it for eternity. At some point people always end up selling their bitcoins one way or another (eg. selling directly to fiat or buying goods where the coins end up on an exchange eventually).

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Quote from: pooya87 on January 09, 2021, 02:36:54 AM

The supply is always increasing even though the rate of this increase goes down. That means every 10 minutes (on average) there are more coins to be bought. You are confusing capped supply with decreasing supply. Bitcoin's supply is capped (has a maximum that can not be surpassed) but it is not decreasing.

The main reason why price goes up is when demand increases (in other words when bitcoin adoption increases and more people start buying bitcoin).

If the supply is capped, that means that we will lose all of it to demands eventually right? I think I covered already the part where the price increase because the demand increase.

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Quote from: zanezane on January 09, 2021, 02:28:41 AM

Quote from: pooya87 on January 09, 2021, 01:46:58 AM

Why do you think the supply is going to be "drained"?

There are lower available coins to be bought. Mining takes time.

The supply is always increasing even though the rate of this increase goes down. That means every 10 minutes (on average) there are more coins to be bought. You are confusing capped supply with decreasing supply. Bitcoin's supply is capped (has a maximum that can not be surpassed) but it is not decreasing.

The main reason why price goes up is when demand increases (in other words when bitcoin adoption increases and more people start buying bitcoin).

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Quote from: pooya87 on January 09, 2021, 01:46:58 AM

Why do you think the supply is going to be "drained"?

There are lower available coins to be bought. Mining takes time.

Quote from: n0ne on January 09, 2021, 02:03:02 AM

Supply draining won't happen at any occasion. The mined coins aren't idle within a centralised system. The network will be strong as more and more usage gets counted. Maybe the denomination gets more zeros added for a single bitcoin.

Will these be enough to resupply the current available coin to cater the demand? AFAIK each block that is mined makes mining another block a little harder.

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Supply draining won't happen at any occasion. The mined coins aren't idle within a centralised system. The network will be strong as more and more usage gets counted. Maybe the denomination gets more zeros added for a single bitcoin.

pooya87

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Why do you think the supply is going to be "drained"?

zanezane

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As the title says, what happens. As the supply goes lower, the prices/demand go up but what happens when the supply is drained? Will we ever reach a price ceiling or the prices will still go up? I do not know any other question that I can think of but if you have one, feel free to reply on this thread if you have other questions.

Topic: What's next for bitcoin after supply drain? (Read 361 times)