Bitcoin Halving

Crypto prices after Bitcoin halving: What next?

Bitcoin’s price is up 120 percent over the last six months

The Bitcoin blockchain software is updated every four years and is known as the Crypto prices Bitcoin halving. A new Bitcoin can be mined for half as long as before the anticipated event. Bitcoin’s value halved thrice: November 28, 2012, July 9, 2016, and May 11, 2020. A few weeks ago, on April 19, 2024, the most recent instalment of the event took place. Now, to mine 1 BTC, miners receive 3.125 BTC.

Following the most recent halving event, the first Satoshi—the smallest unit of Bitcoin—was mined and placed up for auction. The ViaBTC Bitcoin mining pool created the epic sat, worth 33.3 Bitcoin (about $2.13 million). Fineqia CEO Bundeep Rangar said that Bitcoin halving makes the cryptocurrency more scarce by reducing the rate of new Bitcoin issuance.

According to Rangar, “traders speculate on its implications,” which causes market volatility to increase. “As a result of decreased supply meeting sustained or increasing demand, the price of Bitcoin has traditionally increased in the short term before halvings, followed by fluctuations, and finally a gradual price increase.”

Diminishing returns

Even though it was much anticipated, the event isn’t influencing the market as it used to. According to Mostafa Al-Mashita, director of sales and trading at Secure Digital Markets, the halving is an established feature of the Bitcoin protocol. “The market was not surprised by this; rather, the industry has eagerly anticipated it,” Al-Mashita said most of the halving’s price fluctuation has been accounted for. He believes this year’s pre-halving run has protected miners, unlike prior halving occasions where Bitcoin appreciated most after that. He says most miners can maintain a profit margin after the most recent halving event.

“Some miners have estimated marginal production costs of about $20,000/BTC, and the price of Bitcoin has increased by 120 per cent in the past six months,” says Al-Mashita. A smaller number of miners will have to immediately stop operations after this halving, in contrast to earlier cycles. According to Hao Yang, head of financial products at Bybit, one primary reason is the growing interest in and acceptance of Bitcoin as an asset by traditional asset managers over the previous decade. According to Yang, more money is pouring into Bitcoin’s crypto prices, halving the market and driving its price increase. “However, it is important to note that the effect of each halving becomes less significant as Bitcoin’s market cap grows.”

Please wait for it

Bitcoin halvings have traditionally signalled the beginning of a parabolic cycle, which is something that Al-Mashita does concede. When market growth is highly rapid, we say the market is parabolic. Bitcoin might be in one, according to Terence Kwok, inventor of Humanity Protocol. “The effects of the halving aren’t necessarily felt right away, but are experienced more acutely over time,” Kwok says of Bitcoin halving cycles. He provides evidence from blockchain market research company Glassnode to support his claim. The report states that there are now only 450 BTC available as fresh coins.

This pales in comparison to the four-year pre-halving daily average of 900 BTC. However, according to Kwok, 450 will quickly multiply into a substantial sum. A total deficit of 3,150 BTC will occur after one week due to the 450 BTC shortfall on the first day. The value will reach 164,250 BTC by the year’s conclusion. “This supply crunch may begin to exert significant upward pressure on Bitcoin’s price,” claims Kwok, “should demand remain high.” He believes demand will remain high as more jurisdictions permit Bitcoin ETFs. The present state of the market gives Kwok even more peace of mind. According to Kwok, bull runs in the past have frequently been followed by significant corrections. “Thus, we should brace ourselves for months of uncertainty.”

Rising tide

Nevertheless, Yang maintains that the advent of ETFs has brought Bitcoin’s movement back to its more conventional roots. “Conversely, the volume is increasing, and Bitcoin is concluding an ideal Cup and Handle pattern,” remarks Yang. “(This) fits in with the timeline for the halving so far.” In Rangar’s opinion, the general cryptocurrency market will also benefit from Bitcoin’s price movement. In Q1 2024, Bitcoin’s price increased by 64% as investors priced in the impending halving, according to Rangar, who agrees with Al-Mashita.

“Trading is still up 50% on a year-to-date (YTD) basis, but there have been short-term fluctuations driven by speculative trading following the event,” he says. Events like the adoption of Bitcoin-based ETFs and supply dynamics will drive up the price. Rangar believes that other cryptocurrencies gain from favourable Bitcoin momentum and that the larger crypto prices in the Bitcoin halving market tend to follow BTC’s lead.

This is the unique thing about this most recent post-halving incident, according to Al-Mashita. According to him, the innovative aspect of this cycle is the ability for risk-on capital to permeate the entire Bitcoin ecosystem rather than merely Bitcoin itself. “Traders are eyeing networks and ecosystem tokens like STX, RUNE, and ORDI, which they believe have the potential to achieve much larger gains than Bitcoin.” After the halving, Yang thinks investors may be pushed to take risks with memes and altcoins.

There is more to Bitcoin than halving.

Rangar claims that the future of Bitcoin’s price depends on factors such as institutional interest, legislative changes, technological breakthroughs, adoption trends, and short-term volatility. Rangar claims that clear regulations may attract more mainstream investment and that institutional adoption could lead to sustainable price support. “The utility and adoption of Bitcoin are enhanced by continuous technological innovation, such as scalability solutions.” Aquanow research VP Sebastian Davies agrees.

Davies maintains that macroeconomic variables are more relevant, even though. Halving is a significant psychological stimulus with promising implications for supply and demand. He contends that the conditions that supported increased market liquidity in the past—namely, low inflation and low-interest rate expectations—are no longer present. Rate decreases are inevitable in 2024, according to Davies, who cites the US Federal Reserve. But he thinks traders are becoming more and more wary. According to Davies, “it’s hard to see Crypto prices Bitcoin halving asset prices breaking out higher” until. There is greater clarification regarding the direction of monetary policy. A positive surprise might bring this clarification, like a favourable verdict for the ETH spot ETFs.

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