The third supply shock for bitcoin has begun, according to Willy Woo

Amid the rise of bitcoin (BTC) today to a price of more than 108,000 dollars (USD), analyst Willy Woo considers that a new stage of the market has begun.

“Welcome to the third great bitcoin supply shock,” Woo said on his X account, a social network where he has more than 1 million followers.

In other words, Woo foreshadows that current bitcoin prices are not the highs of this cycle, but rather a substantial bullish wave is just beginning.

The specialist indicates that the other two major supply shocks occurred in 2012 and 2020, something that preceded strong upward trends for the currency.

But what does this mean? What is a bitcoin supply shock? Knowing the definition of this term is essential to understanding Woo’s prognosis.

A bitcoin supply shock usually refers to a decrease in the amount of BTC available for sale. in the market. This may be caused by several factors, such as more active accumulation by institutional investors or the reluctance of hodlers to sell their holdings.

Bitcoin has a fixed total supply of 21 million BTC units, making it a scarce asset that cannot be issued unlimitedly. A supply shock, therefore, intensifies this shortage, since it reflects a reduction in the circulating quantity of the currency for sale.

Basic economic theory states that If the supply of a good decreases while demand remains constant or increases, the price of the good tends to rise. In this sense, a bitcoin supply shock can cause a price increase for the currency, especially if demand remains strong.

Woo predicts the entry into bitcoin of institutions and governments

Woo warns that companies are copying the strategy of MicroStrategy, the software company famous for making recurring purchases of bitcoin as an investment. With 439,000 BTC in its reserves, this company, which entered the Nasdaq 100 list this week, has the most holdings in the currency in the world.

Added to this is that Nation states can start secretly accumulating bitcoingiven the possibility that the United States will do so. Donald Trump, the US president-elect, has stated that he wants to turn seized bitcoin holdings into a strategic government reserve asset.

There is also a bill in force in the economic power to acquire 1 million units of BTC, as reported by NoticiasVE. This has led to proposals to buy bitcoin in other countries.

With this possible demand and supply shock, Woo anticipates higher prices for bitcoin, as a phenomenon similar to what was seen in 2012 and 2020. At that time, the amount of BTC available on exchanges also decreased while buying skyrocketed, with the entry of Silicon Valley technologists on the first occasion and MicroStrategy influencing its colleagues on the second.

This can be seen in the following analyst graph, translated into Spanish. This shows the price of bitcoin above and the units of BTC on the exchanges, that is, the buying and selling platforms, below.

Meanwhile, the projections circulating in the market generally agree that the peak of the current bullish cycle of bitcoin will be during 2025. The objectives range mostly between USD 140,000 and USD 250,000. Although, specialists such as the companies Bitwise and Bitcoin Suisse predict higher prices if a super bullish cycle forms.