Fred Thiel, CEO of Marathon Digital, expects that the price effect of the upcoming Bitcoin Halving, scheduled for later this month, might have been accounted for in the market to some degree in advance.
In a recent conversation with Bloomberg, Thiel expressed his views on possible reasons for future price hikes and the resulting consequences for the mining sector.
Bitcoin Halving Impact Mitigated By ETF Surge?
Every four years or so, an essential software modification called the “halving” occurs in Bitcoin’s system. During this event, the number of Bitcoins awarded to miners for verifying transactions is cut in half. Consequently, this decrease in reward incentivizes price growth within the Bitcoin market.
Yet, Thiel expressed a belief that The Halving’s influence might not be as pronounced this round due to the influx of investment brought about by Bitcoin ETFs’ recent approval, which has drawn considerable funds into the market.
The ETF’s approval, which has been extremely popular, has drawn investment into the market and essentially caused some price growth that might have occurred three to six months after the halving event. In other words, a significant portion of this increase is happening now rather than later, thereby increasing demand in the process.
According to Thiel’s perspective, even though the Bitcoin supply decreases by about 450 new coins per day following a halving event, he anticipates the price change might not be very significant.
Nonetheless, the Marathon CEO showed enthusiasm over the upward price movement preceding the halving, remarking:
Miners are thrilled about the upcoming halving since the price increase preceding it is unusual. Instead of declining before the event as typical, prices have risen instead, prompting everyone to capitalize on this situation.
Balancing ETF Inflows And Previous Halving Patterns
During this period, Bitcoin ETF investments have seen significant growth in the US market, with approximately $12 billion being accumulated in the past three months alone, according to Thiel’s observations.
Bitcoin’s recent price increases might be due in part to these inflows, but historical trends suggest that Bitcoin has significant room for further growth before The Halving event.
To truly grasp the current situation, it’s important to closely look into Bitcoin’s remarkable price increase. In just over a year, its value has risen by an impressive 370% from its lowest point at $15,400 during the market downturn, all the way up to a new record high of $73,700 on March 14, 2024.
Alongside this recent increase, historical bitcoin halvings offer valuable clues about its price trends and the possibility of reaching the notable figure of $100,000.
In November 2012, the price of Bitcoin saw a significant jump after its first halving. It started at a low point of $13 and reached an astounding high of $1,152 the next year, representing a striking gain of over 8,700%.
In the same way, the second Bitcoin halving in July 2016 led to a significant increase in its price. It rose from $664 to an all-time high of $17,760, representing a remarkable gain of approximately 2,580%.
In May 2020, the latest Bitcoin Halving occurred, and as a result, its price soared to a remarkable height of $67,000. This represented an impressive leap from its previous low of $9,730, amounting to a staggering 593% price rise post-halving.
From Thiel’s viewpoint, it’s possible that some of The Halving’s impact is already reflected in Bitcoin’s price because of ETF investments. However, based on past trends, it seems that Bitcoin has more growth ahead before The Halving occurs.
Some financial experts predict that the ongoing bull market could reach new heights, potentially surpassing $100,000 per bitcoin, due to the upcoming halving event.
Yet, the future price movement of Bitcoin is uncertain as various influences come into play, including investments from ETFs, past trends, and possible market shifts.
Currently, BTC is trading at $68,400, down 0.4% from yesterday’s price.
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2024-04-11 08:01