[Bitcoin](https://inleo.io/@leoglossary/leoglossary-bitcoin) is the rudder that steers the ship.


When it comes to [cryptocurrency](https://inleo.io/@leoglossary/cryptocurrency), almost all eyes are on Bitcoin.  This was the case since the beginning and still holds true to this [day](https://inleo.io/@leoglossary/leoglossary-day).


That does not mean that, over [time](https://inleo.io/@leoglossary/leoglossary-time), it could not change.  We are going to see a massive spreading of this industry, especially when [AI](https://inleo.io/@leoglossary/leoglossary-artificial-intelligence) agents become commonplace.  Simply looking at the forecast numbers regarding [tokenization](https://inleo.io/@leoglossary/leoglossary-tokenization), even if Bitcoin has a $20 trillion [market](https://inleo.io/@leoglossary/leoglossary-market) cap, it will be a drop in the bucket.


For the moment, Bitcoin is where attention goes.  Markets are driven by psychology, meaning that sentiment is something to watch.  In spite of this, there is a case that could be made for Bitcoin based upon some other factors.


<center> https://img.inleo.io/DQmV4hdchhHZY5o7Y8TCspBiUUsVM1UZYXvnzZFLmC3ZjnA/image.png 
image generated by Grok </center>



# The Supply-Demand Equation


Bitcion is fixed [money](https://inleo.io/@leoglossary/leoglossary-money).  There is a cap on how many units will be available.  The total number will never be known since the 21 million does not include lost [coins](https://inleo.io/@leoglossary/leoglossary-coins).  Some estimate that 5-6 million could be missing.


Whatever the amount, we do know the [emission](https://inleo.io/@leoglossary/leoglossary-emission) rate of Bitcoin.  Every four [years](https://inleo.io/@leoglossary/leoglossary-year), this drops by 50% in the [halving](https://inleo.io/@leoglossary/leoglossary-halving).  This reduces the number of [BTC](https://inleo.io/@leoglossary/leoglossary-btc) produced with each [block](https://inleo.io/@leoglossary/leoglossary-block).  This alters what the [miners](https://inleo.io/@leoglossary/leoglossary-miners) have available to [sell](https://inleo.io/@leoglossary/leoglossary-sell) into the market.


This is a formula which was known since the [Bitcoin white paper](https://inleo.io/@leoglossary/leoglossary-bitcoin-white-paper) was released.  It is a powerful mechanism to potentially drive value.  Ironically, it is also what makes it a lousy [medium of exchange](https://inleo.io/@leoglossary/leoglossary-medium-of-exchange).  That said, we are in the era of "digital gold", something that many seem to be embracing.


It is this outlook that is altering the demand side of the question.  


We can start the discussion with this headline:


 https://img.inleo.io/DQmbo7y1KvuQVCSmfbiUxrFysrQkGBAmixCjpbG5LvJtrPg/bitcoin.png 


We are no longer dealing with a retail sector.  [Investors](https://inleo.io/@leoglossary/leoglossary-investor) are showing up in the form of [corporations](https://inleo.io/@leoglossary/leoglossary-corporation).  It is rather limited at this point but the trend is starting to emerge.


>Public [companies](https://inleo.io/@leoglossary/leoglossary-company-business) holding Bitcoin increased 65% in 2024, signaling early stages of mass corporate adoption.


>New corporate players like Rumble and Workport drive Bitcoin adoption with innovative integration plans.


<center> [Source](https://www.crypto-news-flash.com/corporate-bitcoin-adoption-rises-65-growth-in-one-year/) </center>


A lot is made about the interest by [governments](https://inleo.io/@leoglossary/leoglossary-government).  Certainly this could provide another massive wave of [buy](https://inleo.io/@leoglossary/leoglossary-buy) demand.  However, my view is that it would pale in comparison to what the private sector could accumulate.


Rumble and Workport are not exactly household names.  They each have the potential to have million of dollars worth of BTC in their Treasuries.  If we look at the number of companies of this type, it is easy to see how the numbers game starts to take over.


To add to the mix, we can start with the major corporation like [Apple](https://inleo.io/@leoglossary/leoglossary-apple-inc), Meta, or [Google](https://inleo.io/@leoglossary/leoglossary-google-company).  These could provide orders that will rival many countries.


 https://img.inleo.io/DQmSDshmXvKQwnEYdabUjtkxPpfzEVNXbGpyNCYacc4enor/bitcoin.png 




## Miners Cannot Keep Up


Many dicuss the [inflation](https://inleo.io/@leoglossary/leoglossary-inflation) rate of a [currency](https://inleo.io/@leoglossary/leoglossary-currency).  This is usually a flawed approach since it is only looking at one side of the equation.  


If the supply is x, what does that mean?  People like to apply conclusions while operating in a [vacuum](https://inleo.io/@leoglossary/leoglossary-vacuum).  The supply-demand equation has two sides.  We cannot operation with any rationale only looking at one.


With Bitcoin, we have the emission rate (inflation).  This appears to be swallowed up by the demand.  This is not surprising when we consider what is happening.




>The significant demand for Bitcoin (BTC) by [institutional investors](https://inleo.io/@leoglossary/leoglossary-institutional-investor) via spot BTC [exchange traded fund](https://inleo.io/@leoglossary/leoglossary-exchange-traded-fund-etf) (ETF) is reported to have escalated recently, raising concerns about the ability of miners to adequately reset the market into a state of equilibrium. According to market [data](https://inleo.io/@leoglossary/leoglossary-data), spot BTC ETFs recorded an inflow of $423.6 million (4,349.7 BTC) in the past week, almost doubling the 2,250 BTC mined within the same period.


<center> [Source](https://www.crypto-news-flash.com/spot-bitcoin-etfs-consume-more-btc-than-miners-can-produce-whats-next/) </center>


Why is ETF demand surging?


This could be, in part, due to what we just discussed.  The fact that corporations are jumping onto the Bitcoin bandwagon means they might be doing so through the ETF.  This is a vehicle that removes the worry about custody, allowing companies to aquire simiilar to any other [financial asset](https://inleo.io/@leoglossary/leoglossary-finance-assets).


We have another market that opens up.  


The emergence of the [Bitcoin ETF](https://inleo.io/@leoglossary/leoglossary-bitcoin-etf) allowed a host of financial [accounts](https://inleo.io/@leoglossary/leoglossary-account) to enter.  This could be [pension funds](https://inleo.io/@leoglossary/leoglossary-pension-fund), [retirement](https://inleo.io/@leoglossary/leoglossary-retirement) monies, and other [investment](https://inleo.io/@leoglossary/leoglossary-investment) [portfolios](https://inleo.io/@leoglossary/leoglossary-portfolio) that were banned from holding [digital assets](https://inleo.io/@leoglossary/leoglossary-digital-assets) directly.


Retirement accounts means trillions of dollars can potentially be accessed across the [world](https://inleo.io/@leoglossary/leoglossary-world).  Naturally, not all of this will end up in BTC.  One factor that could help is the fact that many in the United States find their savings to be lacking as they head near retirement age.


Having some exposure to Bitcoin could help to close the gap.


For those younger, it could be a strong long term move, especially if the [history](https://inleo.io/@leoglossary/leoglossary-history) over the last 10 yearrs of outperforming all [asset classes](https://inleo.io/@leoglossary/leoglossary-asset-class) repeats itself.


Like any financial or monetary [assets](https://inleo.io/@leoglossary/leoglossary-asset), it all comes down to [supply and demand](https://inleo.io/@leoglossary/leoglossary-supply-and-demand).


____


<center> [What Is Hive](https://inleo.io/@leoglossary/leoglossary-what-is-hive) </center>


Posted Using [InLeo Alpha](https://inleo.io/@taskmaster4450/the-supplydemand-equation-working-for-bitcoin-8c)