Bitcoin Halving: Expectations and Impacts

London: 8 April 2024 (TraderMade): The countdown has begun! With just 12 days left until Bitcoin's fourth Halving on April 20, 2024, the crypto community is buzzing with excitement and anticipation.

This historic event is expected to significantly impact Bitcoin's economy, drawing attention from investors worldwide. Let's explore what the past tells us and what to expect this time around.

Key Takeaways

• First Halving (Nov 2012): 9,500% price increase in a year.
• Second Halving (July 2016): 4,100% price increase.
• Third Halving (May 2020): 700% price increase, reaching $69,000 by Nov 2021.
• Bitcoin surpassed the previous all-time high of $69K before the fourth Halving.

Historical Performance

Bitcoin's previous halvings have been monumental, with each event triggering substantial price surges:

• First Halving (November 2012): Bitcoin's price skyrocketed by an astonishing 9,500% within a year, jumping from $12 to $1,166.
• Second Halving (July 2016): This event initiated a bull run, propelling Bitcoin's price close to $20,000, marking a 4,100% increase.
• Third Halving (May 2020): Despite the challenges of the COVID-19 pandemic, Bitcoin surged to an all-time high of $69,000 by November 2021, a 700% increase from pre-halving levels.

Analysts, however, suggest that this year might be different.

What's New?

Surprisingly, Bitcoin has already surpassed its previous all-time high of $69K ahead of the fourth Halving. Yet, the upcoming event has high expectations.

Renowned analyst PlanB predicts further growth, with Bitcoin potentially hitting $100,000 this year and soaring past $200,000 in the future, based on his Stock-2-Flow (S2F) model.

Expected Crypto Impact

The fourth Halving is anticipated to have three primary effects on Bitcoin:

• Reduced Daily Production: Similar to gold, Bitcoin's daily production will decrease, reducing its inflation.
• Increased Scarcity: With only 21 million Bitcoins available for mining, the scarcity could drive up demand and price.
• Enhanced Security: Miners are likely to upgrade their equipment, fortifying the network's security.

Current Market Dynamics

Bitcoin's recent performance is noteworthy. It surged past $70,000, reaching a peak of $70,800, marking a 7% increase in just five days. Coinglass data reveals over $115 million in liquidations within 24 hours, primarily from short liquidations.

This rally coincides with a period of strength in European markets, identified as the most bullish region for Bitcoin in 2024 so far.

Whale Moves & Institutional Adoption

Recent data shows a reduction in BTC supply on exchanges, with approximately 111,000 Bitcoin (BTC) moved out of known crypto exchange wallets in the last month.

This trend suggests an increasing preference among investors to hold Bitcoin in private wallets, potentially causing a supply crunch. Furthermore, institutional adoption of Bitcoin has accelerated, with these investors securing their holdings in private wallets or cold storage for long-term purposes.

Genesis's Major Bitcoin Purchase

In a recent development, Genesis acquired 32,041 Bitcoins worth $2.1 billion after selling 36 million GBTC shares. This purchase is part of Genesis's strategy to repay creditors.

Initially valued at $1.4 billion, the shares have surged in value due to Bitcoin's recent price increase, now worth nearly $2.2 billion.

Despite facing financial challenges stemming from the fallout of the FTX bankruptcy in 2022, Genesis is navigating its financial restructuring while the crypto industry adapts to these developments.

Conclusion

The 2024 Halving is a significant milestone in Bitcoin's history, highlighting its short supply and deflationary nature.

While historical data and current market trends indicate the potential for substantial price increases, it's essential to remember the volatile nature of the cryptocurrency market.

Whether the impact is immediate or gradual, one thing is certain: the 2024 Halving will be a pivotal event in Bitcoin's ongoing journey.