The Bitcoin Halving, an eagerly awaited occurrence in the cryptocurrency world, is approaching soon. This event is believed to influence the Bitcoin price significantly in the long run.
Some people worry that the Bitcoin price might have already taken into account the upcoming quadrennial event, as it hit a new record high of $73,700 on March 14th.
Previous Bitcoin halvings didn’t see the cryptocurrency exceeding its all-time high (ATH) prior to the event. But, historical records suggest a notable price rise for Bitcoin in the year that followed each halving.
Experts Predict Delayed Bitcoin Halving Price Impact
Experts believe it takes around half a year for the full effect of fewer new coins being produced to show up. Consequently, the Bitcoin Halving itself might not cause a major price surge right before or right after the event.
German banking experts agree, pointing out that significant price hikes tend to happen before Bitcoin halving events rather than right after them.
One important point to keep in mind is that Bitcoin miners face higher production costs following the Halving. Since the mining rewards get smaller, the activity of mining itself becomes less financially rewarding.
Historically, this situation has resulted in a decrease in Bitcoin mining’s computational power, or hashrate. According to JPMorgan analysts, the cost of producing a single bitcoin may reach an average of $42,000 following the Halving event.
One JPMorgan analyst expressed that this estimation represents the expected price of Bitcoin once the excitement caused by the Bitcoin Halving event subsides, which is predicted to occur after April.
Based on past trends, the price of Bitcoin tends to rise substantially in the year following each halving, despite short-term market fluctuations caused by various factors.
The price increases following the last three Bitcoin halvings were remarkable, with gains of 8,760%, 2,570%, and 594%. Nevertheless, keep in mind that each subsequent halving results in a smaller reduction in the fresh supply of Bitcoin.
Mining Industry Shake-Up
In the mining business, reducing rewards by half (Halving) could result in approximately $10 billion in annual revenue decreases.
Based on Fortune’s report, publicly listed mining companies have made efforts to enhance their robustness, broaden their product lines, and improve their processes. Nevertheless, mining shares have encountered obstacles, resulting in substantial drops for certain companies.
Smaller miners and mining pools might get forced off the grid during industry shifts, leaving more market control for the remaining miners. This change could benefit larger players.
Experts from Bernstein, a leading private asset management company, predict that the mining industry will undergo consolidation. Smaller and less productive companies may need to sell off assets in order to obtain funds and strengthen their financial positions.
Surviving Bitcoin miners are anticipated to reap profits in the future due to their growing market power. This is largely due to the persistent need for Bitcoin from Exchange-Traded Funds (ETFs) for structure.
Timing The Bitcoin Bull Market Peak
According to cryptocurrency expert Rekt Capital, by examining past Bitcoin halving events and the current market trend’s quickening pace, we can gain some understanding of when the crypto’s bull market might reach its peak.
Based on Rekt Capital’s analysis, the peak of a Bitcoin bull market typically occurs around 518 to 546 days following the Halving event.
Despite the current Bitcoin cycle’s surprising quickness, which saw it surpassing past record highs about 260 days earlier than usual, the recent “pre-Halving correction” has caused a delay of approximately 30 days.
Based on the faster viewpoint, the peak of Bitcoin’s bull market could be reached 266 to 315 days after it surpasses its previous record high. With new all-time highs hit in March, this implies a potential bull market top around December 2024 or February 2025 according to Rekt’s assessment.
The two viewpoints remain important during the process, with the former gaining more weight if the trend of acceleration continues. However, extended pullbacks or periods of sideways movement could delay the expected peak of the bull market.
Currently, Bitcoin is being bought and sold for approximately $64,300. This represents an increase from its earlier price of around $59,000 which was observed on Friday morning.
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2024-04-20 01:16