Bitcoin
Bitcoin Halving Fuels Mixed Reactions Among Enthusiasts and Analysts
Bitcoin, the world’s largest cryptocurrency, recently underwent its long-awaited “halving,” a significant event that occurs approximately every four years.
After the halving, Bitcoin’s market performance remained relatively stable, experiencing a slight drop of 0.47% to $63,747.
Bitcoin enthusiasts have eagerly awaited this event, which marks a fundamental change in the cryptocurrency’s underlying technology, with the aim of reducing the rate of creation of new Bitcoins. Satoshi Nakamoto, the pseudonymous creator of Bitcoin, built the halving mechanism into the cryptocurrency’s code since its inception.
For some cryptocurrency advocates, the halving underscores Bitcoin’s value as an increasingly scarce asset. Nakamoto stipulated a finite supply of 21 million tokens for Bitcoin. However, skeptics consider the halving to be just a technical change promoted by speculators to artificially inflate the value of the virtual currency.
The halving process involves reducing the rewards received by cryptocurrency miners for creating new tokens, thus making it more expensive for them to introduce new Bitcoins into circulation.
Parth Chaturvedi, Investment Lead at CoinSwitch Ventures, said: “Today, we are at the height of the Bitcoin era. The network is being better utilized as layer 2 solutions like Stacks bring wider adoption to the network. Others Innovations such as new token standards (Runas) and the repositioning of Bitcoin will also boost the ecosystem. If the scenario changes as predicted after today’s halving event, this could “for the first time” drive the annual inflation rate of the year. BTC below that of gold, particularly among the younger generation, who may increasingly view Bitcoin as a modern store of value, similar to how previous generations viewed gold. This shift in perception could fundamentally reshape attitudes and strategies. of investment in the coming years.
Manhar Garegrat, Country Head India and Global Partnerships at Liminal Custody Solutions said: “The upcoming 4th Bitcoin halving may not be immediately discernible, there are several second-round effects to consider. Previous halvings have often triggered greater market volatility and surge of trading activity. This time, we anticipate similar dynamics, potentially leading to price fluctuations and changes in investor sentiment. The Bitcoin halving could influence the price of Bitcoin due to its greater scarcity, leading to upward price pressure and inflows. new investors in the crypto market. Due to the potential impacts on altcoins, it is worth considering the possibility of new products being introduced into the crypto market. Just as spot ETFs are being launched around the world, innovative financial instruments may emerge. in response to the dynamics surrounding the Bitcoin halving, offering alternatives to investors. pathways to exposure to digital assets.”
Shivam Thakral, CEO of BuyUcoin, India’s second oldest digital asset exchange, said: “The price of Bitcoin may experience short-term corrections or declines following a halving, but historical precedent suggests that the halving may catalyze significant changes in the crypto market, leading to a new all-time high in the coming months, looking at previous cycles, we may witness a notable decline in BTC dominance accompanied by a surge in interest and investment in altcoins within 12 to 18 months after the halving.”
Jyotsna Hirdyani, Head of South Asia at Bitget, said: “After the Bitcoin halving, the cryptocurrency market often goes through a period of increased volatility and price discovery. Historically, post-halving phases have been characterized by movements significant market gains, with Bitcoin frequently reaching new highs (ATH). Market resilience and growing institutional interest in Bitcoin have fueled optimism among investors, leading many to speculate about the potential for Bitcoin to reach price levels. unprecedented.
Rahul Pagidipati, CEO of ZebPay said: “With reduced block rewards, the Bitcoin protocol ensures that the asset remains deflationary during the halving process. In the long term, this reduction in supply could attract more institutional and retail capital, while also amplifying Bitcoin’s stock-to-flow ratio. ZebPay is optimistic about the short- and long-term prospects for Bitcoin and the broader crypto market.”
Rajagopal Menon, Vice President of WazirX said: “Historical analysis of Bitcoin halving events reveals distinct market phases: a pre-halving recovery driven by speculation, followed by a post-halving reaccumulation phase , leading to a parabolic rise to new highs.This parabolic curve is already being witnessed with Bitcoin reaching its all-time high even before the halving event. 12 weeks after halving.
Edul Patel, CEO and Co-Founder of Mudrex said: “Historically, Bitcoin halving events have been associated with substantial price increases. For example, during the first halving in 2012, the price of Bitcoin soared from US$ 13 to a peak of $1,152 the following year. Similarly, the second halving in 2016 saw an increase of $664 to $17,760 the following year. $9,734 to a staggering $67,549 the following year, reward to 3,125 BTC per block. Notably, Bitcoin has already surpassed the $73,000 mark in anticipation of this event.
Mohammed Roshan Aslam, CEO and co-founder of GoSats said: “Bitcoin price may fall further due to macroeconomic events across the world, but considers it a wonderful opportunity for long-term investors, “Bitcoin continues to be an avenue of more affordable investment than gold, stocks and real estate since they are traded completely digitally. While it is true that Bitcoin is witnessing a sharp drop before the halving, we have to keep in mind the usual rise we witness after the events. Bitcoin halving in the past may not happen this time.”
This development follows Bitcoin’s recent rise to an all-time high of $73,803.25 in March, after gradually recovering from the dramatic drop it suffered in 2022. On Thursday, the top cryptocurrency was trading at $63,800.
Excitement surrounding the U.S. Securities and Exchange Commission’s approval of spot Bitcoin exchange-traded funds in January, coupled with expectations of interest rate cuts by central banks, provided additional support for Bitcoin and other cryptocurrencies.
Previous halving events occurred in 2012, 2016, and 2020, with some crypto enthusiasts pointing to subsequent price rallies as indicators of possible post-halving price increases. However, many analysts remain skeptical of such predictions.
“We do not expect any increases in the price of Bitcoin following the halving as it has already been priced in,” analysts at JP Morgan said earlier this week, attributing their position to Bitcoin’s “overbought” status and moderate venture capital funding in the industry. crypto this year.
Financial regulators have consistently warned against the high-risk nature of Bitcoin as an asset with limited real-world applications, although a growing number have begun to approve commercial products tied to Bitcoin.
Andrew O’Neill, crypto analyst at S&P Global, expressed skepticism regarding the predictive value of previous halving events in Bitcoin’s price trajectory, highlighting that several factors influence market dynamics.
Bitcoin has faced challenges establishing a clear direction since reaching an all-time high in March, experiencing declines in recent weeks amid geopolitical tensions and expectations of prolonged higher interest rates from central banks.