Bitcoin's price is affected in many ways, but few events have garnered as much attention as the halving, which has just 10 days left. Looking back, halvings have consistently caused bull markets. Although its impact appears to be decreasing over time, the next halving is still expected to play a significant role in the Bitcoin market. However, several analysts believe that this halving event could lead to a different trend for Bitcoin.
Institutional investors may influence BTC halving
Following Bitcoin's 15th anniversary in January 2024, the cryptocurrency community achieved a significant milestone with the approval of 11 Spot Bitcoin ETFs by the U.S. Securities and Exchange Commission.
For many in the industry, this marks the decades-long evolution of cryptoassets from a niche interest among “cypherpunks” to a legitimate alternative asset class attracting the attention of major asset managers around the world. It was something.
The community is now looking forward to another big event in the coming weeks: Bitcoin's fourth halving. As is well known to crypto traders, halvings in the past have typically triggered an increase in market activity, causing a spike in prices and a subsequent correction phase. However, this time may be different.
Also Read: Bitcoin Halving in 2024: Analysts Warn of Potential 'Sell the News' Scenario
For the first time, coinciding with the halving event, individuals, family offices, and large traditional financial institutions began adding cryptocurrencies to their investment portfolios and products. This represents a notable departure from previous industry norms and suggests that the aftermath of this halving will deviate from previous patterns.
Prior to the past three Bitcoin halvings, the cryptocurrency typically soared to all-time highs and then declined in price. However, this trend is being disrupted by the upcoming halving. Remarkably, Bitcoin reached a peak price of over $70,000 just before the halving, marking the first time such an event had occurred in history.
Will BTC halving attract demand from institutions?
Whenever the supply of Bitcoin is reduced due to a halving, people usually rush to buy it in the hope that the price will rise as before. This is starting to happen again, with Bitcoin hitting new highs recently.
But things are different this time. Because many professional investors who were previously unsure are now getting into the game. The market is becoming more serious, and major investment companies and funds that handle ETFs may start to enter virtual currencies in earnest.
The trend is clear. Large companies such as institutional investors have been acquiring more Bitcoin, with their holdings increasing by 13.4% from 2020 to 2021. By 2023, excitement about institutional Bitcoin products and the potential of his ETF caused a rally. With $2.25 billion invested in digital assets in 2023 alone, professional investors are becoming a powerful force.
This time, due to the presence of these investors, the market may not see the sharp price decline following a halving as seen in the past.
