The cryptocurrency world eagerly awaits the Bitcoin halving of April 2024. This crucial event, where miners’ block rewards are halved, could significantly influence BTC value. Reduced supply meets steady demand, potentially driving prices upward. Anticipation runs high as the halving’s impact unfolds.
Hunter Horsley, CEO of investment firm Bitwise, recently shared his perspective on this pivotal occasion. As a refresher, Bitcoin’s block reward for miners is halved every four years, effectively reducing the daily issuance of new Bitcoin. This systematic decrease influences the overall circulating supply.
The Bitcoin halving event of 2020, which aligned with a BTC price valuation of approximately $9,000, resulted in a daily supply curtailment equating to roughly $9 million. This translated to an annual decrease of $3 billion in supply. However, with the current BTC price hovering in the vicinity of $70,000, analysts anticipate a significantly steeper decline in supply during the impending halving event.
His estimates suggest a substantial diminishing in daily provision, surpassing $32 million, resulting in a yearly decline of approximately $11 billion – a threefold surge contrasted with 2020. This remarkable reduction in freshly issued currency is anticipated to constrict the accessible supply considerably.
Major financial institutions have embraced Bitcoin, driving increased demand. As influential players continue to adopt this digital currency, the limited supply is projected to face heightened demand. This dynamic – a constrained supply coupled with an escalating demand – presents a potentially favorable scenario for BTC price trajectory following the halving.
Bitcoin’s Rise Mirrored by Gold’s Historical Performance
The parallel in price trajectories between Bitcoin and gold over extended timeframes has intrigued crypto enthusiasts like Sam Wouters. He shared his thoughts that BTC’s price chart for the past decade seems to mirror gold’s price chart over the previous 50 years, unfolding at an accelerated pace.
The charts included in Wouters’ tweet show a significant rise in the valuations of Bitcoin and gold across distinct periods. BTC valuation has exhibited an extraordinary surge, soaring from approximately $10,000 in 2017 to surpassing $70,000 presently. Concurrently, gold’s worth has undergone a substantial appreciation, ascending from around $400 in 1975 to exceed $2,200 currently.
Wouters suggests that this rapid growth in Bitcoin’s price may be a reason why some traditional investors are skeptical of the cryptocurrency. Some investors may view Bitcoin’s volatility with concern, especially when compared to the more established asset class of gold.
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