Analyzing the Impact of Bitcoin Halving on Prices by 2024

Bitcoin Halving on Prices by 2024

Hello, let’s discuss the topic of Bitcoin halving. We all know that in April 2024, Bitcoin will experience its next halving event. What makes this halving different from the others? In fact, Bitcoin halving has significant implications for the cryptocurrency world. We understand that the upcoming halving event is going to impact the price of Bitcoin. Therefore, we should study it seriously and pay close attention to this halving.

The Impact of Bitcoin Halving on Price

Bitcoin halving refers to the event where the reward miners receive for verifying transactions on the Bitcoin blockchain is cut in half every four years. This event is designed to curb inflation. When the reward is halved, the number of new bitcoins entering the market drops, leading to a deflationary situation that helps control the circulation velocity of Bitcoin. For miners, their profitability will be affected due to the reduction of mining rewards. If their mining equipment remains unchanged, their profitability will diminish. At this point, miners might take measures to maintain the operation of their facilities.

Thus, Bitcoin halving could lead to large mining operations and major investors adopting hedging strategies, trying to offset the reduction in revenue by pushing up the price of Bitcoin. Fundamentally, with the supply of Bitcoin decreasing and its liquidity reducing, this could possibly drive up its price. We have even heard some predictions, like Bitcoin possibly reaching $150,000, but that remains to be seen.

Market Expectations for Bitcoin Halving

Next, I will share three points of view regarding Bitcoin halving. First, historical data indicates that the four-year halving trend seems to drive up the price of Bitcoin. Some believe that price surges are a key factor driven by the halving, but in reality, the impact of Bitcoin halving on the price is more due to changes in market expectations. After the halving, prices may rise due to the realization of positive news, leading investors to cash out.

For example, during the 2020 halving cycle, the price of Bitcoin started to rise at the end of 2019, but there was no significant increase at the time of halving in 2020. Even between March and July of 2022, Bitcoin trends were very weak, including a market crash. Therefore, the arrival of a bull market for Bitcoin is not solely determined by the halving.

The Relationship Between Economic Cycles and Bitcoin Prices

Second, we need to pay attention to changes in economic cycles. The fluctuations in the economic cycle, moving from recession to prosperity, also drive the rise in Bitcoin prices. For instance, the Federal Reserve’s loose monetary policy to stimulate the economy increased market liquidity, thereby pushing up the price of Bitcoin.

Now, the question we face is, can Bitcoin enter a bull market directly without an economic recession? Potential market trends could change due to the possibility of an economic downturn. If the economy does enter a recession, the probability of a surge in Bitcoin prices could increase.

New Trends in Bitcoin Halving

Finally, let’s look at what’s different about this Bitcoin halving. Firstly, in the last halving cycle, there were about 400,000 addresses holding at least one Bitcoin. Now, the number of addresses with at least one Bitcoin has exceeded 1.1 million, more than doubling. This indicates that the consensus on Bitcoin is gradually building up.

Secondly, we have noticed that institutions are showing interest in Bitcoin spot ETFs, which means more capital is entering the cryptocurrency space. If Bitcoin spot ETFs get approved in the future, we could see a significant rise in the price of Bitcoin.

Thirdly, economic cycles are becoming more complex. The previous consensus was that there would be a bull market every four years, coinciding with Bitcoin halving and economic fluctuations. But this year, the global economic situation is very complex, and the impact of Bitcoin halving on the market might change.

In summary, although each Bitcoin halving is a period of accumulating energy, over time, this accumulation of energy is bound to explode in price, creating new highs. Therefore, we have reason to believe that in the next bull market, the price of Bitcoin could reach $100,000.

Thank you for reading this article. If you liked it, please do not forget to bookmark it and share your thoughts. If the US truly faces an economic recession, then the chances of a Bitcoin price surge may significantly increase. Let’s wait and see how the future of Bitcoin unfolds.