In the approaching week, large Bitcoin investors, referred to as whales, have been actively purchasing a significant amount of Bitcoin. This buying spree comes just before the fourth Bitcoin halving occurs, which reduces the reward for mining new Bitcoins by half to 3.125 BTC. The increased buying activity from these whales implies a positive outlook on the market.
According to CryptoQuant’s analysis of crypto market trends, the interest in Bitcoin among large investors or “whales” has reached a record level. Currently, these investors are purchasing more Bitcoin than the amount being freshly mined.
I’ve been getting a lot of #Bitcoin whale accumulation alerts lately. What’s happening?
— Ki Young Ju (@ki_young_ju) April 12, 2024
With the current production of new Bitcoins falling short of investor demand, this situation implies a scarcity that will become even more pronounced following the halving event, during which an even smaller number of new coins will enter circulation.
Whales buying lots of Bitcoin and more people getting into it could make the price go up.
Prior to every Bitcoin halving, there is often a bull market that kicks off a few months beforehand. This is because people expect the number of new Bitcoins entering circulation to decrease. Following the halving, the Bitcoin price frequently experiences a substantial increase due to the reduced supply and heightened demand.
After each halving event, the rewards Bitcoin miners receive for verifying transactions get reduced by half. Consequently, the financial return on their investment in mining equipment and electricity costs becomes smaller. For these miners to continue operating at a profit, Bitcoin’s price must increase to cover the higher expenses.
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2024-04-12 16:23