What's next for bitcoin after supply drain?

[pooya87]

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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).

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[marcbitcoins]

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.

[zanezane]

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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?

[NeuroticFish]

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.

[exstasie]

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.

[Russlenat]

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.

[zanezane]

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.

[darewaller]

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.

[lixer]

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.

[adaseb]

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.

[exstasie]

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.....

[blckhawk]

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.

[bryant.coleman]

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.