The Bitcoin halving event that was being anticipated for a long time finally took place on April 19th, Friday. This built-in decrease in the emission of new BTC, which occurs every four years, affected mining rewards by reducing them in half. As confirmed by data platforms like mempool.space and Blockchain.com, the adjustment took effect at 8:The anticipated launch time is 10PM Eastern Time on Friday, with the block height reaching 840,000. Surprisingly, the BTC price did not experience drastic changes after the halving and still trading at the level of $64,000.
Bitcoin Halving and Price Movement
By the end of the Bitcoin halving event 4.0, the daily amount of coins received by the miners has been reduced from 900 BTC to 450 BTC. Analysts believe this decrease in the issuance of new BTC will bring in new investors as they anticipate the price of Bitcoin to surge. Also, the increasing demand from spot Bitcoin ETFs is anticipated to be a major contributor to the continuation of this bullish trend. As the Senator from Wyoming, Cynthia Lummis is one of the proponents of BTC, she also welcomed this development.
However, skepticism exists. Major banks like JPMorgan and Deutsche Bank claim the halving is already priced into the market and the event should not have any effect on the cryptocurrency. Kok Kee Chong, CEO of Singapore-based digital-asset exchange AsiaNext, spoke about this sentiment: “As expected, the halving was fully priced in so price movement was limited. Now the industry will have to wait and see whether a rally will occur in the coming weeks amid sustained institutional interest.”
Challenges and Opportunities
The current price optimism could be in a position to be hampered by the overarching macroeconomic factors. The indications that the Fed might stop cutting interest rates and the risk of the escalating tension in the Middle East are among the factors that contributed to the recent stock market volatility.
The main purpose of the halving is to reduce the miner’s profitability rather than to directly influence the market. However, it is supposed to have a strong impact on the mining income. This update can possibly eradicate a large sum of miners’ yearly income which is billions of dollars. Nevertheless, this reduction in Bitcoin mining may be mitigated if the cryptocurrency price rises further.
Short-Term Volatility and Long-Term Outlook
When Could Bitcoin Peak In This Bull Market?
Historically, Bitcoin has peaked in its Bull Market 518-546 days after the Halving (Chart 1)
This is how typical Bitcoin Halving Cycles have progressed
So if history repeats…
Next Bull Market peak may occur 518-546 days… pic.twitter.com/QXZUS7ZyjU
— Rekt Capital (@rektcapital) April 19, 2024
In the short term, the BTC price can be under pressure from the side of miners who seek to compensate for the revenue losses by selling their BTC holdings. On the other hand, 65% year-to-date rally stoked by spot Bitcoin ETFs brings an opportunity for long term investors to buy the dip. In the past, it has reached its highest level during the bull cycle at a time that is 518-546 days after the halving. The cycle will continue as before, and the next peak of BTC could be seen during September-October 2024.
