Updated 4/20 below. This article was originally published on April 19
Bitcoin
BTC
BTC
is hours away from its next supply reduction, known as the bitcoin halving, amid fears of a “rapid and cataclysmic” collapse of the US dollar.
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The price of bitcoin, up about 330% since falling to a recent low of $15,000 per bitcoin in late 2022, has struggled in recent weeks despite growing expectations that China could be on the point of causing the price of bitcoin to explode.
Today, as Binance’s Bitcoin wallet issues “credible” warning against iPhone hacking, a closely watched analyst predicted that the bitcoin halving could catapult the bitcoin price to nearly 1.8 million dollars, which would give bitcoin a market capitalization of nearly $35 trillion, even if Wall Street banks issue. serious warnings about Bitcoin price halving.
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The price of bitcoin fell ahead of the latest bitcoin halving, although some believe bitcoin … [+]
The Bitcoin halving – a supply reduction that will see the Bitcoin block reward fall from 6.25 bitcoins to 3.125 – is expected to take place later today, potentially disrupting the bitcoin industry’s economics. Bitcoin which has changed dramatically since the last supply reduction in 2020.
The halving, reducing the daily supply of new bitcoins from around 900 to 450, is just hours away, according to the NiceHash countdown. The 2024 bitcoin halving is the fourth, following previous halvings in 2012, 2016 and 2020.
“If we get a cycle similar to the previous cycle, looking at historical performance one year after the halving, bitcoin could reach $450,000 per year by now, or $270,000 if this cycle turns out to be closer to 2016,” Noelle Acheson, Bitcoin analyst and author of the Crypto is Macro Now newsletter, wrote, citing Bloomberg data.
However, using Axios According to the data, Acheson found that the price of bitcoin could “reach $350,000 (using the previous cycle as a guide) or $1.8 million (applying the performance of the 2016 cycle)”, which would give the bitcoin has a market capitalization of $35 trillion.
4/20 Update: Bitcoin completed its fourth halving around 8 p.m. ET after the network issued its 840,000th block, the so-called block height pre-programmed by Bitcoin’s mysterious creator Satoshi Nakamoto when the block reward would be cut in half. Bitcoin miners, who secure the network with very powerful computers, will now receive 3.125 bitcoins for each block mined, compared to 6.25 bitcoins yesterday.
The price of bitcoin remained stable during the period leading up to the closely watched supply reduction and in the hours afterward.
“If data from previous Bitcoin halving cycles can tell us anything about the upcoming halving, then one could assume that a potential impact will likely not become apparent until more than a year, or even 18 months after the halving. event”, Michael Anderson, co-founder. of Framework Ventures, a crypto-focused investor, said in emailed comments.
“To put it simply, while halvings tend to attract a lot of media attention and serve as a timely reminder of the importance of bitcoin’s limited money supply, the supply issuance reduction has not not historically had an immediate effect on the crypto markets That said, this is the first crypto market cycle where bitcoin reached an all-time high before being halved, implying that the old ones. models are probably less reliable.
The countdown has already begun for the next bitcoin halving, which will see the number of new bitcoins issued to miners decrease again, currently scheduled for early March 2028.
“In the short term, the upcoming halving will slightly imbalance supply and demand, putting pressure on the market as more investors look to get a piece of the pie,” said Duncan Ash , head of strategy at Coincover, in emailed comments.
“This is expected to continue until high prices deter new investors, restoring a closer balance between the number of buyers and sellers and stabilizing the market. Furthermore, the industry will emerge with more users, a higher market capitalization and a larger market. As such, we will likely see a stabilizing effect on the market in the medium to long term.
This bitcoin halving is the first to occur outside of the Federal Reserve’s zirp (zero interest rate policy) era, the first after the launch of a fleet of exchange-traded funds (ETFs) long-awaited bitcoin on Wall Street and the first from China. kicked out Bitcoin miners from the country in 2021.
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The price of Bitcoin has skyrocketed over the past year, erasing the price slump of 2022 before that. … [+]
“We are currently in an environment of high inflation and high interest rates,” Jeff Hancock, chief executive of crypto app Coinpass, said in emailed comments. “The bitcoin market has gone from a hobby for crypto enthusiasts to a real asset of institutional interest, which is why I think this cycle will be different,” Hancock said, pointing to the fleet of Wall Street spot bitcoin ETF. “Institutional demand for Bitcoin is here to stay.”
The Bitcoin halving will continue approximately every four years until approximately 2140. Once the Bitcoin network no longer produces new Bitcoins, miners will only earn transaction fees, something they are already preparing for with protocols like Ordinals, Runes, and BRC-20. which drove up transaction fees.
After weeks of speculation, including JPMorgan and Goldman Sachs
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Analysts warned this week that the price of Bitcoin could fall immediately after the halving, but there is still little consensus on what the supply reduction will mean for the price of Bitcoin.
Historically, the price of Bitcoin has climbed in the months following the three previous Bitcoin halvings. Andrew O’Neill, crypto analyst at S&P Global, said Reuters he is “somewhat skeptical about what lessons can be learned in terms of price forecasting from previous halvings.”
