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So far, each Bitcoin halving has been described as the ‘biggest one yet’ by the crypto community. There is no denying that halvings are impactful events, however, the 2024 halving is set to be truly remarkable.
Combining the price pumps of halvings with the increasing demand from spot Bitcoin ETFs, this year’s halving may have what it takes to push Bitcoin prices to all-time highs.
CEO of Omnia Markets, Mitesh Shah, described this correlation, stating, “Bitcoin is well-positioned to grow this year following the spot ETF approvals and the halving, expected to take place in April. The ETF approval now opens the doors to the enormous TradFi wealth to enter the market, while the halving is expected to build upon this momentum throughout the year as the next Bull run, which I believe will lead to a new ATH (all-time high).”
Could the 2024 halving have the winning combo to push the Bitcoin price to a record ATH? As the demand from Bitcoin ETFs mitigates the selling pressure of the halving, it's a possibility. Let’s dive in.
Making Sense of Bitcoin Halving
Bitcoin halvings are essentially an automated supply adjustment. They decrease the amount of new coins created in each block verification, thereby ensuring scarcity and preventing inflation from decreasing the purchasing power of Bitcoin.
The amount of reward Bitcoins is cut down by 50% with each halving. Currently, around 900 Bitcoins are rewarded to miners and released into the network daily. The next halving will cut the number of newly minted Bitcoin down to 450, considerably decreasing the supply.
The halvings are coded into the protocol and designed to occur every 210,000 blocks, which takes around four years to mine. The last halving took place in May 2020 and cut the 12.5-Bitcoin reward-per-block down to 6.25. In less than two months, the Bitcoin reward-per-block will be halved down to 3.125.
Is This Halving “The One?”
The uniqueness of this halving is best described by Michael Saylor, CEO of Microstrategy, who said during his Bloomberg interview, “The approval of spot ETFs is going to be a major catalyst that’s going to definitely drive the demand shock, and then that will be followed in April with a supply shock.”
The reason behind the crypto community’s excitement about the 2024 halving is the existence, and success, of spot Bitcoin ETFs. On January 10, the SEC made a landmark decision and approved 11 different Bitcoin ETF products to be listed and traded on registered exchange platforms. This action introduced Bitcoin to traditional investors, which remarkably increased the demand for Bitcoin.
The 2024 halving will be the first halving in crypto history where the demand for Bitcoin comes both from the crypto community and traditional investors. This amplified demand is anticipated to work wonders both while climbing the prices high pre-halving and mitigating the selling pressure that emerges after halving.
Grayscale’s most recent report puts it in more technical terms, stating, “Historically, block rewards have introduced potential sell pressure to the market, with the possibility that all newly mined Bitcoin could be sold, impacting prices.”
However, the report continues by citing the massive amount of inflows through Bitcoin ETFs and adds, “Assuming a steady state of net inflows alongside continued Bitcoin ecosystem adoption and maturation, ETF flows could serve as a counterbalance to the ongoing sell pressure from mining issuance.”
Will 2024 Be Where the Halving Will Shine?
This will be the fourth halving event the cryptosphere has witnessed since Bitcoin’s inception in 2009, meaning we have enough data to make solid predictions about its aftermath. However, considering the impact of Bitcoin ETFs, the predictions we make might fall short.
As recently laid out by crypto analyst Rekt Capital, halving periods have five stages. At the time of this writing, we are experiencing the second stage.
The first stage occurs around 70 days before the halving and records downward price movements as investors anticipate the upcoming halving event. Ten days later, the second stage starts, and the Bitcoin price records bullish movements, pushed by short-term traders. At the time of this writing, we are around 60 days away from the 2024 halving, and Bitcoin exceeded the $50,000 mark on February 13, hitting its ATH since December 2021.
The third stage, taking place just weeks before the halving, is expected to record falling prices due to investors anticipating the upcoming pressure to sell.
The fourth stage, which can happen up to 150 days after the halving, hosts the selling and re-accumulation period that follows the halving. Finally, the fifth stage takes place after the accumulation, where Bitcoin typically records a sharp increase in new ATHs.
The 2024 halving period seems like any other as price movements are following the trends and investors are behaving as expected. However, it is worth noting that we are still in the early stages of the halving period.
The uniqueness of the 2024 Bitcoin halving will show itself in the third stage, which will start around a few weeks before the halving when miners and investors will be inclined to exit their positions as they expect prices to fall. At this critical point, the inflow from spot Bitcoin ETFs might disrupt the regular stages of the halving and prevent prices from crashing. If this extra inflow manages to keep the flagship crypto afloat, the next stages of the halving hold a greater chance for a record ATH in prices.
Author Bio
Hunter Chynoweth merges the precision and patience of being a bowhunter with the endurance and determination he gets from being an ultra-marathon runner. Beyond his physical pursuits, Hunter is passionate about crypto, AI, and Web3, holding investments in Bitcoin (BTC) and Ethereum (ETH). He attends wealth conferences and tech events all over the world, bringing together these experiences with his love of endurance sports and Web3 advancements into his writing.
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