What will really happen to Bitcoin and the entire crypto market as a result of the halving?
The Bitcoin halving is a historic event that generates all kinds of feelings in the wide world of digital currencies. It not only has influence on the queen cryptocurrencies, but on the rest of the alternative currency market and related submarkets. It is an epicenter event that shakes all the assets of the same genealogical line.
The halving is an automatic network event that occurs every 210,000 blocks or four years. It consists of cutting BTC rewards to miners by 50% for each valid block of transactions they process on the network. Considering the market and the influence of the currency, the magnitude of this event becomes greater with each edition.
Historically, the cut causes increases, since it is the main axis of the Bitcoin price cycle due to its deflationary nature. So far, there have been 3 halvings in the history of this blockchain (2012, 2016 and 2020). A year after the event, the price of BTC reached large increases in each edition. Now, 45 days after the fourth cut, the bullish cycle seems to be getting ahead of itself.
Halving, ETFs and Bitcoin Price
Unlike the three previous halving editions, the fourth is marked by the presence of Bitcoin ETFs on the NYSE. These products cause enormous buying pressure on the currency, leading the price to approach all-time highs even before the cut takes place.
If this EFT fever continues, the usual approximate wait of 12 months will probably not be altered. In simple words, the effect of the new shortage will allow the foundations of the new historical maximum to be established around this time in 2025. So what happens now is a kind of calisthenics. It should be noted that the latter is assuming that the theory of BTC price cycles is real.
There will be a new all-time high caused by the halving, there is no doubt about that. The debate centers on what the final price will be. Some analysts venture to predict the price of Bitcoin at $500,000 or more. Others are a little more moderate and put it between $120,000 and $200,000 per coin.
The truth about all this is that the currency has not yet surpassed the 2021 highs, but it most likely will. In that period there are still entry opportunities for investors. Whatever happens, the Bitcoin halving will generate a 50% cut in liquidity. Consequently, if demand remains as it is now, the price rally could increase compared to the current point.
For investors who think long term, the good news is greater. There will still be 28 halvings pending in the Bitcoin network.
Halving Impact on the Cryptocurrency Market
The impact of the halving on the cryptocurrency market is multifaceted, affecting investors and traders. Investors must exercise patience, as Bitcoin prices tend to reach new all-time highs with each halving, albeit with longer lead time and decreasing price multipliers.
The growth in the number of Bitcoin wallets suggests broader adoption, although the number of whale wallets has decreased. Traders, on the other hand, see an increase in trading volume and growing anticipation towards the halving that could boost market activity.
By Leonardo Perez
