After Bitcoin’s recent climb to $95,000, many are reeling from the rapid increase and are hotly contesting the idea that such a price point is sustainable. Twelve months on from the most recent halving event in April 2024, how to make money online’s MetaBlock X investigates what’s driving this rally. From the combination of on-chain metrics, corporate adoption, and macroeconomic influences. By providing a comprehensive analysis, we aim to equip investors with the knowledge to navigate the current market with clarity, confidence, and control.

Decoding On-Chain Metrics

On-chain metrics are essential tools that provide deep insights into the health and behavior of the Bitcoin network. Just by looking at these indicators, investors can get more insight into what’s going on in terms of market sentiment and where prices could be headed.

Key On-Chain Indicators

  • MVRV (Market Value to Realized Value): This ratio compares the current market capitalization of Bitcoin to the realized capitalization, which is the sum of the value of all Bitcoins when they were last moved. A high MVRV suggests the market may be overvalued, while a low MVRV indicates potential undervaluation.
  • NUPL (Net Unrealized Profit or Loss): NUPL calculates the difference between unrealized profits and unrealized losses across the entire Bitcoin network. It helps determine whether the network is in a state of net profit or loss, providing insights into investor sentiment.
  • Spent Output Profit Ratio (SOPR): SOPR examines the price at which Bitcoin outputs were created versus the price at which they were spent. A ratio above one indicates that, on average, Bitcoin holders are selling at a profit, while a ratio below one suggests they are selling at a loss.
  • Exchange Flows: Monitoring the flow of Bitcoin into and out of exchanges can reveal buying and selling pressure. Large inflows to exchanges may indicate increased selling pressure, while outflows suggest accumulation.
  • Miner Outflows: Miners play a crucial role in the Bitcoin ecosystem. Tracking their outflows can provide insights into potential sell-side pressure, as miners often sell Bitcoin to cover operational costs.

By looking at these metrics as a whole, investors can get a well-rounded picture of the Bitcoin market to help them make more informed decisions.

The Corporate Bitcoin Bonanza

As we’ve seen over the past few months, corporate adoption of Bitcoin has been one of the biggest catalysts for its increase in price. More companies are seeing Bitcoin as a useful asset and putting it on their balance sheets.

Institutional Demand

The last few months usually include corporations acquiring Bitcoin at an accelerating rate. In Q1 of 2025 alone, these public companies bought a staggering 95,431 BTC. This increase is the steepest quarterly growth since we started tracking the data back in 2020. This unprecedented demand is a testament to the increasing confidence in Bitcoin’s long-term potential.

Growing Corporate Holdings

The total value of Bitcoin on public corporate balance sheets has skyrocketed. At the end of 2023 that would be roughly 263,000 BTC. Now, that number has skyrocketed to almost 594,000 BTC, more than doubling in growth rate at an incredible 127%. This massive spike comes as no surprise, considering the acceleration of corporate adoption into Bitcoin.

Supply Dynamics

The new supply of Bitcoin (the issuance via mining) in early 2025 will be around 367,100 BTC according to the Bitcoin Block Reward Schedule [2]. This supply / demand imbalance has played a role in the recent upward pressure on Bitcoin’s price. As more corporate treasurers accumulate Bitcoin, the influence supply outlook further sinks increasing demand with less supply pushing prices higher still.

Future Potential

Corporate holdings have more than doubled since 2007. Despite this, companies still only control roughly 4% of Bitcoin’s total supply. This all implies significant upside potential for additional corporate adoption, which would be the next market force affecting Bitcoin’s price level.

Strategic Asset

Corporations are growing bullish on Bitcoin as a hedge against inflation and a strategic asset to hold on their balance sheets. Yet macroeconomic uncertainties continue to cast a long shadow. This would encourage corporations to continue allocating a portion of their cash reserves to BTC which would help increase demand and positively affect its price.

Macroeconomic Winds

It’s important to remember that macroeconomic factors are far more powerful than Bitcoin’s structural narrative in causing price movements. Getting a handle on these forces is important because it’s essential to judge whether the current price level is sustainable or not.

Key Macroeconomic Influences

  • US Dollar Exchange Rate: The US dollar exchange rate has a notable inverse relationship with Bitcoin returns. A weaker dollar can contribute to a surge in Bitcoin's value, as investors seek alternative assets to preserve their wealth.
  • Treasury Yields: Treasury yields have a positive correlation with Bitcoin's returns. When Treasury yields rise, investors may seek higher returns in assets like Bitcoin.
  • Inflation Rates: Bitcoin is increasingly seen as a hedge against inflation. As inflation erodes the purchasing power of fiat currencies, investors may turn to Bitcoin as a store of value, driving up its price.
  • Geopolitical Stability: Uncertainty in traditional markets caused by global events such as war, political instability, and economic downturns can cause investors to move their assets into Bitcoin.

The Halving Effect

These halving events—a.k.a subsidies—happen about every four years on the Bitcoin network and have previously played a large role in creating bull markets.

Reduced Supply

During the most recent halving that occurred in April 2024, the block reward was lowered from 6.25 Bitcoins per block to 3.125 Bitcoins per block. That’s because the rate at which new Bitcoins are released into circulation has halved. So, there are many less brand new coins flooding the market.

Increased Scarcity

With fewer new Bitcoins mined, the increasing scarcity of Bitcoin makes it potentially more valuable. This additional scarcity can make a space more desirable and thus create greater demand and eventually a higher price. The halving event acts as a trigger for price appreciation alongside the basic economic law of supply and demand.

Historical Trends

Specifically, historically the price of Bitcoin has gone up over the course of a year following a halving event. Following the third halving in May 2020, the price rose to over $8,000. By April 2021, it had climbed to over $69,000, an all-time high. Drawing from precedent, this historical trend indicates that the immediate surge in price is just the start of a longer-term bullish trend after each halving.

Long-Term Investor Growth

These long-term investors — defined as those who’ve held Bitcoin for more than three years — are gaining dominance. With every halving that occurs, this percentage only increases. This indicates increased future demand. Long-term holders are less likely to sell when prices drop, reducing the supply in circulation.

Mining Pool Dynamics

The collective reserves of these mining pools have fallen by about 23% since October 18, 2023. The drop in reserves indicates that miners are currently sending less Bitcoin to exchanges. This reduction might have the effect of raising prices.

Navigating the Market

Today’s Bitcoin market is dynamic and complicated. It is important for investors to incorporate approaches that are appropriate for their level of risk tolerance and in line with their specific investment objectives. Here are a few common strategies:

  • Time in the Market: A passive investment strategy where an investor holds a position for an extended period (usually a few years or more).
  • Dollar Cost Averaging: Investing fixed amounts of money into a crypto asset at regular time intervals (e.g., weekly, fortnightly, monthly) to reduce the impact of market volatility.
  • Long-Term Investing: Buying an asset and holding it until it reaches a predetermined price target, requiring patience and a long-term outlook.

By using these strategies, investors can reduce their risk and still tap into the long-term potential of Bitcoin.

Conclusion

Bitcoin’s recent rise to $95,000 can be attributed to a handful of factors. Positive on-chain metrics, increased corporate adoption, favorable macroeconomic conditions, and the approaching halving event are all contributing greatly to this strong rise. The sustainability of this price level is questionable. Understanding what’s behind those trends is key to targeting limited investment dollars to where they can do the most good. MetaBlock X is focused on providing you the strategic advantage. Join us to chart your course through the crypto frontier with clarity, confidence, and control!