The much-anticipated Bitcoin halving, scheduled for April 20, 2024, has stirred several discussions within the crypto community. While historically, halvings (a process in which the reward for mining Bitcoin is halved, theoretically controlling inflation) have resulted in increases in Bitcoin’s value following each event, questions remain about whether this trend will continue in 2024.
Bitcoin halving is conducted roughly every four years, a process aimed at controlling the token’s inflation rate by reducing the number of coins created, thus preserving its scarcity and value. However, Dr. John Hawkins from the University of Canberra points out that halving doesn’t reduce Bitcoin supply; instead, it limits the increase in supply.
Historically, Bitcoin’s price tended to rally in anticipation of a halving and correct itself post-halving. Early price rises throughout 2024 may be attributed to speculation about the potential supply shock instigated by the halving and increased market anticipation of the event.
Crypto experts have analysed the historical movements associated with previous halvings in 2012, 2016, and 2020. However, numerous factors such as increased awareness, adoption rates, and the number of cryptocurrency users make the 2024 halving unique.
The number of users in the cryptocurrencies market is expected to reach around 990 million by 2028, in comparison to only 1.3% in existence in 2012. The presence of Exchange Traded Funds (ETFs), which came into the play following the approval from US regulators, is also anticipated to impact the forthcoming halving.
At the same time, Bitcoin’s current trading value brings a new twist to the halving event. With Bitcoin trading at an all-time high prior to the halving, the event’s outcome is seen as potentially groundbreaking.
This halving event also comes in the wake of significant global turbulence, from the COVID-19 pandemic and war in Europe to record inflation rates, which have led to volatility in the cryptocurrency market.
While the focus is on Bitcoin, the halving may also impact Bitcoin ETFs. These instruments enable investors to access the cryptic asset through traditional investment accounts without the challenges of buying, storing, and safekeeping Bitcoin.
In terms of predictions, existing patterns indicate that halvings can lead to increased Bitcoin prices. However, experts acknowledge there’s no guaranteed outcome. The economy, market confidence, and other factors can influence Bitcoin’s post-halving price.
While the halving event is being anticipated widely, it’s uncertain if it will be eventful as expected. Moreover, it is advisable for investors to do thorough research and due diligence before investing in cryptocurrencies, given the market’s volatility.
