Bitcoin, the world's largest cryptocurrency, recently underwent its long-awaited “halving,” a significant event that occurs approximately every four years.
After the halving, Bitcoin's market performance remained relatively stable, declining slightly by 0.47% to settle at $63,747.
Bitcoin enthusiasts have been eagerly awaiting this event, which marks a pivotal change in the cryptocurrency's underlying technology, aimed at reducing the rate at which new Bitcoins are created. Satoshi Nakamoto, Bitcoin's pseudonymous creator, had a halving mechanism built into the cryptocurrency's code from its inception.
For some crypto advocates, the halving highlights Bitcoin's value as an increasingly rare asset. Mr. Nakamoto had set the supply of Bitcoin at 21 million tokens. However, skeptics believe that halving is simply a technical change promoted by speculators to artificially inflate the value of cryptocurrencies.
The halving process means that cryptocurrency miners receive less reward for creating new tokens, making it more expensive to put new Bitcoin into circulation.
Parth Chaturvedi, Head of Investments at CoinSwitch Ventures, said: “Today, we are at the cusp of the Bitcoin era, with layer 2 solutions like Stack leading to widespread adoption of the network and increasing utilization of the network. The same goes for other innovations such as the new token standard (Runes).” And Bitcoin re-staking could also drive the ecosystem forward, with BTC’s annual inflation rate potentially falling below gold’s for the “first time” if things change as expected after today’s halving event. There is sex. Younger generations in particular may increasingly think of Bitcoin as a modern store of value similar to how previous generations viewed gold. This change in perception could fundamentally change investment attitudes and strategies for years to come. ”
Manhar Garegrat, country head of India and global partnerships at Liminal Custody Solutions, said: “The upcoming fourth Bitcoin halving may not be immediately recognizable, but it is a secondary event that should be considered. There are several implications: Past halvings have often caused increased market volatility and increased trading activity.” Similar movements are expected this time as well, which could lead to price fluctuations and changes in investor sentiment, increasing the scarcity of Bitcoin, leading to upward price pressure on the virtual currency market and an influx of new investors. there is. Given the potential impact on altcoins, innovations to provide investors with an alternative in response to the movement around the Bitcoin halving, as well as spot ETFs being launched around the world. It is worth considering that new financial products may emerge. A means of accessing digital assets. ”
Shivam Thakral, CEO of BuyUcoin, India's second-longest operating digital asset exchange, said, “Bitcoin prices may experience a short-term correction or decline after the halving.'' “However, historical precedent suggests that a halving could cause major changes in the crypto market.” Observing previous cycles, we can see a surge in interest and investment in altcoins within 12-18 months of the halving, leading to a noticeable decline in BTC's dominance. ”
Jyotsna Hirdyani, Head of South Asia at Bitget, said: “Following a Bitcoin halving, crypto markets often experience a period of heightened volatility and price discovery.Historically, the post-halving phase It is characterized by large market fluctuations, with Bitcoin frequently reaching all-time highs.” Market resilience and increasing institutional interest in Bitcoin have increased investor optimism and led many to speculate about Bitcoin's potential to reach unprecedented price levels. Ta. ”
Rahul Pagidipati, CEO of ZebPay, said: In the long term, this reduced supply could attract more institutional and retail capital while expanding Bitcoin's stock-to-flow ratio. ZebPay is bullish on both the short-term and long-term prospects for Bitcoin and the broader crypto market. ”
“Historical analysis of Bitcoin halving events reveals a clear market phase: a speculative bull market before the halving, followed by a post-halving bull market,” said Rajagopal Menon, Vice President, WazirX. This is an optimistic move given that this parabola typically reaches the ATH 6-12 weeks after the halving occurs. is.”
Edul Patel, CEO and co-founder of Mudrex, said: “Historically, Bitcoin halving events have been associated with significant price increases. For example, during the first halving in 2012, the price of Bitcoin It soared from $13 to a peak of $1,152 the following year.” Similarly, in his second halving in 2016, he skyrocketed from $664 to $17,760 the following year. His fourth halving in April 2024 will reduce mining. Notably, Bitcoin has already breached the $73,000 mark in preparation for this event, and investors should continue to do their own research and diversify their portfolios. ”
Mohammed Roshan Aslam, CEO and Co-Founder of GoSats, said: “Bitcoin prices may fall further due to macroeconomic conditions around the world, but this is an excellent opportunity for long-term investors.'' “Bitcoin remains a more accessible investment vehicle than other investment vehicles.'' While it is true that Bitcoin has experienced a sharp decline ahead of the halving as it is completely digitally traded, it is possible that the usual spikes seen after past Bitcoin halving events will occur. You need to keep one thing in mind. It won't happen this time. ”
This development follows Bitcoin's surge to an all-time high of $73,803.25 in March, after gradually recovering from the dramatic sell-off it experienced in 2022. As of Thursday, the leading cryptocurrency was trading at $63,800.
Excitement surrounding the U.S. Securities and Exchange Commission's approval of a Spot Bitcoin ETF in January and expectations for interest rate cuts from central banks provided further support for Bitcoin and other cryptocurrencies.
Previous halving events have occurred in 2012, 2016, and 2020, and some crypto enthusiasts have pointed to subsequent price increases as an indicator of a possible post-halving price spike. There is. However, many analysts remain skeptical of these predictions.
Analysts at JPMorgan said earlier this week that they “do not expect a rise in the price of Bitcoin after the halving as it is already priced in,” and their stance is that Bitcoin is in an “overbought” state. , this year's venture capital funding in the virtual currency industry has been suppressed.
Financial regulators have consistently warned about Bitcoin's high-risk nature as an asset with limited real-world application, but more companies are beginning to approve trading products linked to Bitcoin. There is.
S&P Global crypto analyst Andrew O'Neill expresses skepticism about the predictive value of past halving events on Bitcoin's price trajectory, highlighting that multiple factors influence market dynamics did.
Bitcoin has faced challenges establishing a clear direction since hitting a record high in March, falling in recent weeks amid geopolitical tensions and expectations that central banks will raise long-term interest rates. have experienced.
