While bitcoin prices have been somewhat stagnant in recent weeks, there are those who believe there is still room for growth. Adam Back, a British cryptographer and cypherpunk whose name appears in the Bitcoin whitepaper, recently stated that while there has been some consolidation in the market, bitcoin is ready to reach new heights due to fundamental market dynamics.

In an interview with CNBC, Back highlighted that we could be in the early stages of a bitcoin bull market. “Typically the bull market cycle lasts for a certain period after the halving and so we’re still in the early innings,” Back stressed, highlighting the increased demand for bitcoin that both institutions and retail were exerting in the wider market.

Back remarked that there was strong demand from bitcoin exchange-traded funds (ETFs), instruments that allow institutions to invest in bitcoin without worrying about custody. He estimated that the demand from these sources is roughly double the daily bitcoin production.

He also counted on one of the largest sources of demand in the market today: Michael Saylor’s Strategy, which is also siphoning twice the number of bitcoin produced each day. This means that only these two sources are absorbing four times the bitcoin produced, foreshadowing an incoming bitcoin supply shock.

Nonetheless, if the sovereign treasuries come in, with countries buying bitcoin for their country reserves, Back states that prices would skyrocket. Nations would have to compete with other traditional demand sources for the bitcoin available in the market.

“You’d see sovereign competition. As soon as one of the bigger countries jumps in, I think
the others will feel forced to follow suit so that would you know all bets would be off if that happens,” Back concluded.

Read more: The Many Facts Pointing to Adam Back Being Satoshi Nakamoto

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