Today at around 9 p.m. ET, the Bitcoin network is predicted to undergo a halving event. This means that the reward given to miners for adding new blocks to the blockchain will be cut in half, from 6.25 Bitcoins to 3.125 Bitcoins. Some businesses in the industry share their thoughts on how this latest Bitcoin halving might influence its price trend.
The cost of a bitcoin can change dramatically following a halving event, also referred to as “halvenings” by some. These occurrences often precede robust upward trends in the Bitcoin market, although the connection between them is not always straightforward.
Previously, bitcoin’s price has experienced significant increases within six months following every halving occasion, based on data from Binance CEO Richard Teng. He pointed out that new record-high prices emerged for bitcoin during each four-year interval between past halving events.
“What’s on everyone’s mind is how the bitcoin price will be influenced by the upcoming halvening, as suggested by Thomas Perfumo, Kraken’s Head of Strategy. However, it’s important to note that while the market trend may be starting earlier than usual, history indicates we haven’t yet reached its conclusion.”
According to research conducted by Nansen analyst Aurélie BarTHERE, the price of Bitcoin tends to increase by a factor of 5 to 6 in the quarter-year period following each halving event. Even with current market fluctuations influenced by economic conditions, BarTHERE maintains her positive outlook on Bitcoin’s future growth trend.
“Unlike those who focus on the technical aspects of Bitcoin’s price to forecast an increase, I instead consider the essential elements of supply and demand and arrive at the same optimistic viewpoint,” Greg Beard, the CEO of Stronghold Digital Mining, expressed.
The involvement of more investors in the bitcoin market due to the availability of bitcoin ETFs in the US stock exchanges, in addition to price volatility, sets this Bitcoin boom apart from previous ones.
After the last halving occurred in 2020, Alex Cable, vice president of Chainalysis WEMEA Region, pointed out that “the fourth halving has transpired during a significant rise in institutional involvement.”
According to Cable’s perspective, institutions are no longer mere participants in the market; they now significantly influence its direction. This involvement introduces a fresh layer of trustworthiness, dependability, and appeal to mainstream finance. Simultaneously, Bitcoin is forging innovative avenues within the global economy, enhancing its demand and versatility.
In simpler terms, Scott Shapiro, who is the Senior Product Director at Coinbase, explains that before the Bitcoin halving event, the demand for Bitcoin was influenced by something new – the spot bitcoin ETFs. These ETFs have significantly altered Bitcoin’s market structure.
Shapiro proposed that regular investments into these assets might substantially boost their value, considering the decreasing rate at which new bitcoin is mined. This doesn’t necessarily mean an instant shortage, but the merging of increased investment opportunities and changing supply conditions could create a distinctive post-halving phase.
Some people believe that the upcoming halving in Bitcoin’s supply production is more about storytelling than having a significant effect. According to Claire Ching from Gemini, even though the daily output will decrease by half, it represents only a minor portion of the overall trading volume. The price of Bitcoin will predominantly be influenced by factors related to demand, such as ETFs and institutional investment.
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2024-04-19 20:20