Within the next 12 hours, an important occurrence known as the Bitcoin Halving will transpire. This significant event within the crypto sphere could potentially shake up markets and determine the future of various cryptocurrencies and assets.
The upcoming Halving in 2024 is expected to influence not just the cost of Bitcoin, the leading cryptocurrency, but also various other virtual currencies and assets such as Ethereum, Litecoin, alternative coins (Altcoins), and meme coins.
Previous experiences show that the price of Bitcoin tends to skyrocket following a split. Nevertheless, the inherent volatility of cryptocurrencies, combined with market fluctuations and potential global turmoil, may burst the bubbles of optimistic investors.
What is Bitcoin halving?
New Bitcoin transactions are logged in an open, distributed database called blockchain. Miners, who use advanced equipment to decipher complex cryptographic problems, add new blocks to the chain and are compensated with newly minted Bitcoins as a reward for their work. Essentially, the creation of new Bitcoins is an outcome of this mining process. (For beginners: Mining is the only means by which new Bitcoins come into existence.)
The Blockchain system, through its built-in algorithm, restricts the production of Bitcoin to a maximum of 21 million units. Approximately every four years, or after the mining of around 210,000 blocks, an event called “halving” occurs. During this halving process, the reward given to miners for adding new transaction blocks is reduced by half. The purpose of this algorithm is to manage the balance between Bitcoin supply and demand, thus maintaining its perceived value as a scarce digital currency.
How will the BTC price evolve after the halving takes place?
When the number of Bitcoins in circulation decreases, their price is expected to rise based on economic theory. This occurs because the value of the asset remains constant while its availability shrinks, leading to a natural increase in price.
After each of the past three Bitcoin halvings in 2012, 2016, and 2020, the average price increase over the following 60 days was approximately 16%.
Mixed Sentiments from Market:
Despite historical Bitcoin price increases following halving events, opinions on the upcoming event’s impact are divided. Some crypto supporters anticipate a bull market, while firms such as JP Morgan and Goldman Sachs predict minimal price growth after the halving.
Goldman explained that various economic factors influence Bitcoin’s rise, with key events such as the approval of spot Bitcoin ETFs and the subsequent surge in BTC prices driven by investments in these U.S.-based funds potentially indicating that a large portion of the bitcoin market’s post-halving anticipations have already been realized.
Pavel Zavadskii, the founder of Biqutex, expressed that currently, the crypto market is noticeably bullish. This is indicated by Bitcoin’s early March achievement of its all-time high following the approval and market debut of Bitcoin spot ETFs on the United States stock exchange.
The growth of Bitcoin (BTC) has begun to slow down and I don’t foresee any major breakthroughs, such as surpassing $100,000, in the near future. Before investing in BTC at its current price, consider the risks carefully since the anticipated event – halving – is already factored into the price, so do not anticipate an immediate price surge following the reduction of block rewards.
In the same vein, Jyotsana Hirdyani, Bitget’s South Asia Head, believes that Bitcoin’s price might drop briefly after its halving event. However, past trends indicate that this occurrence could spark substantial changes within the cryptocurrency market, potentially resulting in a new record-breaking price peak during the following months.
Looking back at past trends, we can expect a significant decrease in Bitcoin’s market dominance and an increase in altcoin popularity around 12 to 18 months after the next halving. Moreover, the recent green light given by the Hong Kong regulator for Bitcoin and Ether ETFs signifies increasing institutional acceptance of these cryptocurrencies, which is a significant step forward for their adoption. With the upcoming Bitcoin halving event, we can anticipate a promising future for Bitcoin.
War as a hurdle in Bitcoin’s stride and Elon’s two cents for peace
The sound of war drums echoes through the Middle East, as tensions between Iran and Israel, and the ongoing conflict between Israel and Hamas in the Gaza Strip of Palestine, have made this truth evident.
More recently, Iran responded with force after Israeli attacks on their embassy in Syria resulted in the deaths of high-ranking military personnel. In response, Iran launched hundreds of drones, ballistic missiles, and cruise missiles towards Israel. Previously, Israel had retaliated by striking targets within Iran’s borders using missiles and drones.
The ongoing tension between Israel and Iran might cause Bitcoin’s price to decrease, as reported in this article where Bitcoin dipped below $60,000 after news broke of an Israeli missile attack on Iran. The cryptocurrency dropped by over 5.5%, reaching a new low of $59,961.
In response to the worldwide turmoil, Elon Musk, tech entrepreneur, shared an image on X (previously twitter) on a Friday, showcasing a SpaceX rocket launch. His caption read, “Let’s aim for the stars with our rockets, not at each other.”
Also Read : War and Crypto: Will Iran-Israel crisis swim or sink Crypto ahead of Halving?
Conclusion
Based on economic principles of supply and demand for bitcoin, the price should generally rise following a halving event. However, various macroeconomic conditions and global occurrences can influence these prices as well. The halving has already sparked activity in the crypto market; it remains to be seen which direction the trend will continue.
Read More
Sorry. No data so far.
2024-04-19 16:05