What's next for bitcoin after supply drain?

[zanezane]

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.

[pooya87]

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

[n0ne]

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.

[zanezane]

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

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

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.

[pooya87]

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).

[zanezane]

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.

[pooya87]

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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).

[Poker Player]

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.

[zanezane]

~

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.

[rodskee]

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.

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.

[ranochigo]

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.

[zanezane]

~

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?

~

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.

[jrrsparkles]

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.

[Oasisman]

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.

[ranochigo]

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.

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.

[NeuroticFish]

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.

[zanezane]

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?

[pooya87]

~
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.

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.

[adaseb]

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.

[zanezane]

~

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.