- The Bitcoin halving is a key event in the crypto calendar.
- Previous halvings have seen the asset increase.
- We asked hedge fund and crypto exchange executives to tell us when to expect a rally.
- In the short term, things could go wrong.
The Bitcoin halving is almost upon us.
The event will sap the supply of new coins to the market at a time when demand has soared, seemingly setting the cryptocurrency up for a massive rally.
Still, don’t hold your breath waiting for Bitcoin to hit an all-time high, according to leaders of hedge fund, crypto exchange, payments and blockchain analysts.
“The price reaction is usually not immediate,” said Rikke Staer, CEO of payment solutions platform Coinify. “Major growth after halving occurs [after] six and 18 months, and larger price movements become statistically less likely as market size increases.
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Brian Dixon, CEO of hedge fund Off the Chain Capital, echoed this sentiment and said DL News expect the price to start increasing after 12 to 18 months.
What is halving?
The halving is a predetermined event encoded at the very heart of Bitcoin. It is designed to limit the supply of cryptocurrency.
This happens every four years, or, to be more precise, every 210,000 blocks created. At the time of writing, this is likely to happen around midnight on April 20, UK time.
The 2024 halving comes amid stubborn inflation that has seen central banks refuse to cut interest rates and growing geopolitical tensions that threaten investor confidence in riskier assets like Bitcoin.
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Unlike previous halvings, in which new records were set after the events, this is the first time an all-time high has been reached before this one.
Institutional investors
Additionally, the halving comes amid a substantial increase in institutional engagement, as new Bitcoin spot exchange-traded funds have introduced a new generation of retail investors to the asset.
Alex Cable, vice president of WEMEA at blockchain analytics firm Chainalysis, noted that the percentage of Bitcoin held by institutional investors increased after each halving event.
“Institutions are not just entering the market, they are now shaping its trajectory,” he said in an email.
Sales
Although there is consensus that the price will eventually rise, market observers are betting that the price will fall in the short term because things are different this time around.
Investors could dump Bitcoin once the halving occurs, a so-called news sell-off event, after sentiment was hit by escalating tensions in the Middle East, Jag said Kooner, head of derivatives at Bitfinex. DL News.
Traders are, however, optimistic that the price will rise later in the year, according to a K33 Research report released earlier this week.
Eric Johansson is editor-in-chief of DL News. Sebastian Sinclair is markets correspondent for DL News. Do you have any advice? Send them by email to [email protected] And [email protected].