Samson Mow expects Bitcoin to rise to $1 million “within days or weeks” once a supply shortage occurs

JAN3 CEO and Bitcoin bull Samson Mow believes Bitcoin will experience a significant supply shock in the coming days, potentially causing its price to rise to $1 million within “days or weeks.”

The forecast depends on a perceived supply shock caused by demand from the recently approved Bitcoin ETFs and a number of market adjustments currently taking place.

Supply shock

The launch of Bitcoin ETFs has already attracted billions of dollars in trading volume. At the same time, BlackRock's acquisition of 11,500 BTC significantly reduced the available market supply within the first two trading days.

The purchase is equivalent to purchasing 13 days worth of Bitcoin supply, which is currently around 900 BTC/day. Experts expect the demand for BTC to increase exponentially, especially if the ETFs continue to see significant inflows.

Based on CryptoSlate's analysis of available BTC supply, if institutions continue to purchase BTC at a similarly aggressive price, it would only take about 120 days for supply to dry up, making Bitcoin the tightest it has ever been in its history.

Adding to the complexity of market dynamics is the upcoming Bitcoin halving, an event that has historically had a significant impact on price by reducing the speed at which new BTC are created. The reward for mining new blocks will be halved from 6.25 BTC to 3.125 BTC in approximately 90 to 120 days.

Combined with the fact that existing demand is outstripping supply, this could lead to an unprecedented rise in prices as demand reaches new record highs while supply falls to its lowest level in history.

Max pain theory

Mow assumes that markets will likely follow the “Max Pain Theory” – based on traditional financial markets. It suggests a scenario in which Bitcoin price movements could result in maximum financial losses for the largest number of market participants.

Although the theory is not officially defined in the crypto space, it typically refers to the price level at which most options contracts expire worthless, resulting in significant losses for holders. In the case of Bitcoin, this could lead to rapid and extreme price fluctuations, potentially surprising many traders and investors.

Mow believes that a key aspect of this theory in the Bitcoin market is the possibility of a short squeeze in the coming days. A short squeeze occurs when the price of Bitcoin unexpectedly rises, forcing those who bet against it (short sellers) to buy back at higher prices to limit losses, driving the price further higher.

The concept of maximum pain is also related to the unpredictability of Bitcoin's price movements and market psychology. Bitcoin has a history of defying conventional market expectations, and a scenario that causes the greatest possible financial harm to the greatest number of market participants is consistent with its volatile and unpredictable nature.

According to Mow, a quick rise to $1 million would disrupt the strategic plans of many, including nation-states and corporations looking to invest in Bitcoin. Due to the high fees, this could also impact the usability of the Lightning Network and destroy the stock-to-flow (S2F) model that many use to predict Bitcoin value.

Mow also commented on another series of events that would occur if Bitcoin reached the $1 million price too quickly, including:

Among the most significant impacts would be the legacy financial system, which Mow believes is unprepared for a rapid restructuring around Bitcoin.

BTC price and market data

At press time, Bitcoin is ranked #1 in terms of market capitalization, and so is the BTC price down 2.04% in the last 24 hours. BTC has a market capitalization of $823.32 billion with a 24-hour trading volume of $16.62 billion. Learn more about BTC ›

BTCUSD chart from TradingView

Market overview

At press time, the global cryptocurrency market is valued at at 1.65 trillion dollars with a 24-hour volume of $46.95 billion. Bitcoin dominance is currently at 49.73%. Find out more >

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