The Fourth Bitcoin Halving: Why This Time Is Different
The once-every-four-years event of Bitcoin block reward halving is soon upon us, with the current data suggesting the event will take place on April 20th. This fourth halving is distinctive in several ways from the previous ones in 2012, 2016, and 2020, which did not showcase the same dynamics.
First-Time Price Record Break Before Halving
For the first time in its history, the price of Bitcoin has broken records just before a halving event. While price peaks usually occur months after the halving, this time it was witnessed 1.5 months prior. Antoni Trenchev, co-founder of cryptocurrency exchange Nexo, assessing the situation stated, “What’s unique about this halving is that Bitcoin has already surpassed the highest levels of the previous cycle. This has never happened before, making it more challenging to predict the length and severity of the cycle.”
Professional Investors Entering the Market
Another reason why this upcoming halving will not be like the others is the entry of professional investors into the market. From BlackRock to Fidelity, and from J.P. Morgan to Goldman Sachs, major Wall Street institutions, family offices, asset management companies, and pension funds have begun integrating Bitcoin into their portfolios and services. Several of these institutions have also been vocal about the upcoming halving.
Impact of Bitcoin ETFs
The existence of Bitcoin ETFs also makes this halving fundamentally different from previous ones. Since the launch of the Bitcoin ETF on January 11, it has seen a net inflow of $12.6 billion, equivalent to 180,000 BTC—more than double the BTC output during the same period. It is also noteworthy that major brokerage firms have not yet completed the ETF review process, nor have they started offering these products to their clients. The ETFs could ensure that the impact of the halving is more pronounced than in the past. Last week, Hut8 Mining CEO Asher Genoot indicated that major banks contacted them directly to purchase Bitcoin due to exchange supply shortages. With the daily production set to decrease by half post-halving, the situation is becoming even more compelling.
Long-Term Bull Market Beginning
Coinbase suggests that the current price trend is just the beginning of a long-term bull market, and that the supply and demand dynamics require further upward movement to achieve balance. Rather than waiting for an immediate price surge post-halving, focusing on the long-term outlook may be a better strategy. Given the market’s tendency to overreact in the short term, the real opportunity for investors lies beyond these fluctuations in the long-term trend.
Published on April 12, 2024, at 13:42, this post “The Fourth Bitcoin Halving: Why This Time Is Different” first appeared on Bitcoin News – UzmanCoin – Cryptocurrency and Blockchain.
