Demand Dips For Bitcoin Are Temporary; But Lack Of Supply Is Permanent

Demand Dips For Bitcoin Are Temporary; But Lack Of Supply Is Permanent

From the "Double Spend“ scare of January 20, 2021 to the flight to the relative safety of cryptocurrency's decentralized trading platform on January 30, 2021, a ten day window in the life of Bitcoin illustrates the power of fixed supply versus variable demand on prices.

When rumors surfaced of a possible glitch in the blockchain system supporting Bitcoin, buying interest in the megacrypto briefly waned. In all markets, any seed of doubt, especially in a still nascent, somewhat hard to understand asset, will send some investors to the sidelines. This is what happened for about a week in the Bitcoin markets, and prices pulled back. But when instability hit trading platforms in the wake of the Reddit inspired investing frenzy in heavily shorted securities, resurgent demand for Bitcoin popped prices back up towards their all time highs, largely because Bitcoin supply did not increase rapidly enough to meet demand.

The "double spend“ Bitcoin rumors were unequivocally proven false, stemming from a naturally occurring but extremely rare bifurcation in the resolution system for blockchain transactions that basically self corrects as blockchain activities progress. (At least that's the best way I can describe things with my very limited understanding of the process. Suffice it