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Bitcoin halving

Bitcoin Boosts: Value Skyrockets 11 Years After Halving

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On November 28, 2012, Bitcoin, the world’s first and most prominent cryptocurrency, witnessed a significant event – its first-ever halving. This event, programmed into the Bitcoin protocol, reduces the reward given to miners for verifying transactions by half. The purpose of halvings is to control the inflation of Bitcoin by gradually decreasing the supply of new coins entering the market.

Since the first halving, BTC’s price has experienced remarkable growth. From trading at just around $12 in 2012, it has soared to its current price of over $37,000. This impressive rise can be partly attributed to the halvings, which have reduced the supply of new BTCs, thus increasing their value.

The correlation between Bitcoin halvings and price surges is evident in historical data. Following the first halving in 2012, BTC’s price reached nearly $1,000 within a year. Similarly, the second halving in 2016 triggered a 350% surge in the year following the event, with BTC eventually reaching all-time highs of nearly $20,000 in December 2017.

The Bitcoin community eagerly anticipates the fourth BTC halving, expected to occur on April 17, 2024. Many BTC enthusiasts are particularly optimistic about the price in 2024, fueled by the prospect of the US Securities and Exchange Commission (SEC) finally approving a spot BTC exchange-traded fund (ETF).

The Future of Bitcoin Halvings

The 2024 halving won’t be the last. Bitcoin miner rewards will continue to halve until they reach 0 BTC after all 21 million BTCs are mined. Based on the current schedule, the maximum supply of 21 million BTCs will be reached around 2140.

BTC halvings have played a significant role in shaping the cryptocurrency’s price trajectory. By reducing the supply of new BTC, halvings have contributed to BTC’s scarcity, which in turn has driven up its value. As BTC matures and gains wider adoption, it will be interesting to observe how future halvings impact the cryptocurrency’s price and the overall market.

Bitcoin’s Fourth Halving: Supply Dynamics & Investor Insights in Latest On-Chain Report

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Glassnode’s latest Week On-Chain report reveals that the Bitcoin community eagerly anticipates the fourth halving event, a significant occurrence in the cryptocurrency calendar every 210,000 blocks. This event slashes the rate of new coin issuance by 50%, a move that has historically impacted Bitcoin’s market dynamics.

While the fourth halving is set to occur at block height 840,000, pinning down the exact date and time remains elusive due to mining blocks’ inherent variability and probabilistic nature. According to current estimates, the halving will occur around April 23, 2024, based on the average block interval.

Bitcoin miners, facing substantial capital and operational expenses, have traditionally used most of their BTC income to cover costs. The year-to-date high of USD value issued to miners through newly minted supply stands at approximately $1 billion monthly. With the upcoming halving, this figure is poised to drop to $500 million monthly, creating a considerable capital inflow challenge.

Beyond the technical intricacies of the halving, it is also a focal point for investors. Historical data indicates that all previous halvings have triggered impressive market performances in the 365 days that followed, sparking debates on whether the halving is the primary driver of these price appreciation cycles.

On-Chain Dynamics: Navigating Bitcoin’s Supply Landscape

Glassnode’s report delves into on-chain perspectives, exploring supply and investor behavior patterns. Assessing the available supply, the report notes that short-term holder supply is at a multi-year low of 2.33 million BTC, indicating a decline in coins actively circulating. Other metrics, such as Futures Open Interest, add nuance to the analysis.

The report also examines stored supply rates, highlighting a trend of declining available supply and accelerating stored supply since the market-wide sell-off in June 2022. Notably, the 90-day change in illiquid supply is increasing at a rate of 180,000 BTC per quarter, surpassing the issuance rate.

Analyzing shifting capital tides, Glassnode focuses on the rotation of capital within the digital asset ecosystem using the Realized Cap as a proxy. Long-term investors’ behavior, capital inflows, and the impact on market cap changes are scrutinized to provide insights into Bitcoin’s current liquidity and volatility conditions.

Nevertheless, Glassnode’s comprehensive analysis suggests that the upcoming fourth halving is occurring in a Bitcoin environment characterized by historically low available supply, increased rates of supply storage, and tight liquidity conditions, adding complexity and intrigue to the evolving cryptocurrency market landscape.

Related Reading | Bitcoin Resilience Amid Chaos: Insights from BitMEX Founder

Bitcoin’s Struggle & Altcoins’ Resurgence: Are We At The End Of Bear Market Cycle?

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Michaël van de Poppe, CEO and founder of MN Trading suggested in a recent tweet that altcoins are currently in the final stage of the bear market cycle, indicating the possibility of a bullish trend on the horizon. However, he acknowledged the pain and dwindling sentiment prevailing in the crypto sphere, with most of the interest gravitating towards Bitcoin, which still struggles to surpass certain key resistance levels.

Bitcoin’s Ongoing Struggle & A Prolonged Altcoin Bear Market

This prolonged bear market for altcoins, spanning approximately 29 months, has been a grueling ordeal for enthusiasts and investors. Notably, altcoins, including Chainlink, reached their peaks in August 2020 (BTC pair) and May 2021 in USD value. The impending Bitcoin halving and the potential introduction of a Bitcoin spot ETF have further complicated the market dynamics, especially against a backdrop of geopolitical turbulence.

As gold prices rise due to global uncertainties, Bitcoin seems poised to benefit from a similar trend. The endorsement of BTC by prominent figures, such as Blackrock’s CEO, as a digital version of gold has instilled confidence in the cryptocurrency.

Van de Poppe emphasized that Bitcoin usually leads the market, with altcoins gaining traction when confidence returns. Notable altcoins like Chainlink, Solana, and Injective have already shown upward trends. Ethereum, however, has faced challenges with the delay of the ETH ETF Futures launch and ongoing corrections against the Bitcoin pair.

The prevailing sentiment among the general public remains cautious, with many not realizing the massive potential of cryptocurrency at this moment. Van de Poppe compared the current situation to 2015-2016, when the market slowly began its ascent towards the Bitcoin halving, indicating a possible turning point for altcoins. According to historical data, the months leading up to the Bitcoin halving have often marked the bottom for altcoins.

Analyst Mags, in a separate tweet, highlighted the buying opportunities that BTC bear markets offer. Two significant buying opportunities emerge around 500 days and 180 days before the halving event, with the second dip historically never falling below the price of the first buying opportunity. These opportunities have consistently generated substantial returns, even during unforeseen events like a black swan.

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Bitcoin’s Next Halving Beckons: Will History Repeat Itself?

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In a recent Twitter post, Crypto analyst Miles Deutscher draws intriguing parallels between Bitcoin’s current price movement and its historical behavior preceding halving events. The cryptocurrency market’s fascination with Bitcoin’s price trends in the run-up to halvings is in the spotlight.

Deutscher astutely observes that BTC typically experiences a phase of sideways price action from the second quarter to the fourth quarter of pre-halving years. This period of subdued trading often becomes the calm before the storm, with bullish surges becoming evident around November 21st.

The next Bitcoin halving is eagerly anticipated to occur early in 2024, a momentous event that slashes the reward granted to miners by a substantial 50%. Historically, such halvings have acted as catalysts for monumental bull runs, generating substantial excitement among cryptocurrency enthusiasts.

Bitcoin’s Diminishing Dominance Sparks Concern

However, Crypto Capital Venture founder Dan Gambardello introduces a note of caution. He highlights a concerning macro indicator: BTC diminishing dominance. Currently hovering around 51%, BTC’s market dominance has dipped significantly from the 70% it held during the same period in the previous cycle.

Nonetheless, experts argue that the ongoing consolidation aligns perfectly with BTC’s historical behavior before the onset of its supply-shocking halving events. This observation suggests that the world’s premier cryptocurrency is on track, adhering to the roadmap of previous cycles.

The Bitcoin halving is a recurrent event, transpiring approximately every four years. During this pivotal occurrence, miners see their rewards for processing BTC transactions slashed in half, decelerating the creation of new BTC and ultimately impacting the overall supply.

This crucial event plays a pivotal role in shaping BTC scarcity and its resistance to inflation. The last scheduled halving is anticipated to unfold in 2140, culminating in the total number of Bitcoins in circulation reaching its predefined limit of 21 million.

As the next halving event approaches, Bitcoin’s price action continues to mirror patterns witnessed in the past. This offers a glimmer of hope to those anticipating historic price surges. However, the declining dominance of BTC serves as a stark reminder of the potential risks if mainstream demand fails to materialize in the manner many expect. Excitement abounds in cryptocurrency as the countdown to Bitcoin’s next halving event ticks away.

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Bitcoin Booms: Explosive Surge Expected in Next Halving

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The recent announcement by Changpeng Zhao, commonly known as “CZ,” regarding Binance’s addition of the Bitcoin halving countdown to its homepage has once again ignited interest and speculation around this pivotal event in the world of cryptocurrency. BTC halvings have historically been a source of fascination and intrigue for the crypto community, and they often trigger a flurry of discussions, expectations, and predictions.

As we approach another Bitcoin halving, it’s essential to draw lessons from the past three halvings. While history can’t predict the future, it does offer valuable insights into the patterns and behaviors that have surrounded these events.

Leading up to a Bitcoin halving, the cryptocurrency world experiences a significant increase in activity and chatter. News outlets, social media, and online forums buzz with discussions about the event. Traders and enthusiasts alike eagerly anticipate what the halving may bring, fueling a sense of hope and anxiety. This heightened atmosphere of speculation adds to the overall hype surrounding the event.

However, it’s crucial to manage expectations. Contrary to some expectations, the day immediately following the halving does not typically witness a doubling of the BTC price. This common misconception often leads to puzzled inquiries from newcomers in the crypto space.

Deciphering Bitcoin’s Price Puzzle Post-Halving

The real action tends to unfold in the year following the halving. Historically, Bitcoin has seen remarkable price surges, reaching new all-time highs (ATH). This phenomenon prompts many to wonder about the connection between halvings and price increases. It’s important to note that while there is a correlation, it doesn’t necessarily imply causation. Several factors, including market sentiment, adoption, and external events, contribute to Bitcoin’s price movements.

In conclusion, Bitcoin halvings are significant events that spark excitement and discussion within the crypto community. While history has shown that they are associated with price increases, it’s crucial to remember that correlation doesn’t equal causation. The cryptocurrency market is influenced by various complex factors, and predicting its future remains a challenging endeavor.

As the countdown to the next Bitcoin halving continues, participants should approach it with a measured perspective, mindful of both the past and the uncertain nature of the future.

Catalysts For The Crypto Bull Run: Macro Influences & Bitcoin Halving

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In a recent interview, prominent macro investor and Real Vision CEO Raoul Pal made a bold prediction, suggesting that the next crypto bull market will likely kick off in the second quarter of 2024. Pal’s forecast centers around the upcoming Bitcoin halving event, but he emphasizes that macroeconomic factors will be the primary drivers of this anticipated uptrend.

Pal notes that the Bitcoin halving cycle tends to coincide with specific macroeconomic conditions, primarily characterized by monetary expansion and low-interest rates. According to him, these macro factors have dominated previous halving events, creating a conducive environment for cryptocurrency price surges. While Pal acknowledges that the halving narrative might be overstated, he underscores that it continues to drive market sentiment effectively.

One of the key catalysts Pal points to for the crypto market 2024 is the likelihood of central banks further reducing interest rates and potential fiscal stimulus measures, particularly in the lead-up to the United States presidential election. However, Pal refrains from making specific price predictions, citing the scrutiny that often accompanies such forecasts.

Arthur Hayes’ Crypto Bull Market Prediction

On the flip side of this prediction, Arthur Hayes, the former CEO of BitMEX, has offered an alternative perspective. In a recent tweet, Hayes drew attention to the surging U.S. Treasury yields as a potential precursor to a new bull market for Bitcoin and cryptocurrencies. He highlighted the concept of a “bear steepener,” which signifies a scenario where long-term interest rates rise more rapidly than short-term rates.

Hayes argues that the current steep rise in the 2s30s curve (the difference between 30-year and two-year yields), combined with increasing long- and short-term interest rates, is exerting significant pressure on the overall economy. He contends that banks, due to their portfolios’ leverage and non-linear risks, are likely to sell bonds or pay fixed rates as interest rates continue to rise. This selling pressure, in turn, could lead to further declines in bond prices.

Hayes suggests that these economic dynamics will inevitably result from a return to massive liquidity injections, countering the quantitative tightening observed since late 2021 and potentially reigniting the crypto bull market.

However, Hayes cautions that such a transition may not be without casualties along the way. As U.S. government bond yields hit 5% this week for the first time since August 2007, the global financial landscape appears to be at a critical juncture, with significant implications for the cryptocurrency market.

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Bitcoin’s Mysterious Buyer & Exciting Bull Run: Crypto Analysts Insights

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Crypto Rover, a prominent cryptocurrency analyst, has shed light on the rapidly decreasing availability of Bitcoin on major exchanges over the past 30 days. According to the data, Binance witnessed a significant decrease of 11,500 BTC, while Coinbase reported a decrease of 1,100 BTC. 

Other exchanges collectively saw a decrease of 3,500 Bitcoins. The big question on everyone’s mind is: who is behind these substantial purchases, with speculations swirling around BlackRock?

Analyst Crypto Simon chimed in on this matter, suggesting that while BlackRock is a potential buyer, it could also be other institutional investors or individual holders looking to diversify their portfolios. The mystery surrounding the buyer’s identity adds an element of intrigue to the ever-evolving cryptocurrency market. Speculations are rife, with mentions of Microstrategy, China, and BlackRock circulating in the community.

In a subsequent tweet, Crypto Rover shared some compelling reasons for the excitement surrounding the upcoming BTC bull run. With only 1.83 million BTC available on exchanges, the introduction of a Bitcoin spot ETF, the impending Bitcoin halving, and potential rate cuts and quantitative easing measures from The Fed, the stage seems set for an exhilarating ride in the world of cryptocurrencies.

Bitcoin’s Trajectory: 2022 To 2025

Rover also provided insights into BTC’s trajectory in the coming years. In 2022 and 2023, factors like global conflicts, interest rate hikes, crashes in other cryptocurrencies, SEC-related uncertainties, and the Evergrande bankruptcy are expected to impact Bitcoin’s performance. Looking ahead to 2024 and 2025, a spot ETF introduction, further rate cuts, quantitative easing, and another Bitcoin halving are on the horizon.

However, technical analyst Cryptorphic delved into the Bitcoin halving roadmap in a separate tweet. Noting previous halvings in 2012, 2016, and 2020, Cryptorphic projected the next halving to occur around April 25, 2024, and estimated it could last 478 to 512 days. 

Based on fractals and chart data, Cryptorphic predicted that BTC’s next bull market peak would likely be in September 2025, with a target price of approximately $115,123—a remarkable 330% increase from the current market price.

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Did Bitcoin’s Current Bearish Rally Began During “Positive Q2 2020”?

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The second quarter of 2020 has been extremely tumultuous. Bitcoin  and the rest of the crypto market initially put their right foot on the gas and the market exploded. According to data provided by Binance Research, BTC USD was up by 42% in Q2 2020, making it one of the best quarters in recent coin history.

 

bitcoin 2020

Other altcoins were also able to take advantage of the rally, with the likes of Ethereum, Bitcoin , and Litecoin sustaining significant gains. Correlations between the various crypto assets had also remained high in the charts, but slightly lower compared to Q1. The 90-day rolling correlation between the S&P 500 and the BTC was positive. But its influence decreased dramatically after mid-June.

Despite major positive moves by BTC USD, Binance’s report noted that it was crucial to note that almost all of BTC USD’s gains came in the first 45 days of the quarter. Referring to it as a “Kangaroo market,” the market environment was divided between the period when prices were going up and the period when prices were falling.

Now, although many supporters have liked to believe that current market stagnation and decline is due to recent market inactivity, the above data may suggest that Q2 2020 was not entirely positive.

Did Bitcoin ‘s current bearish picture start after mid-May?

Let us have some of the facts right. BTC USD’s last high occurred at the end of May when Bitcoin reached $10,250. From here on, the asset’s inability to breach $10,000 was rightly questioned, but the reason is that Bitcoin cash was halved on 11 May. Casual viewers hoped for a bullish rally right after the halving, but it has historically been identified that the BTC usually follows a prolonged correction for the first 6 months after the halving.

It is therefore not inaccurate to state that Bitcoin’s 42 percent positive return in Q2 2020 was down to the hype of the pre-halving. After the halving has been completed, Bitcoin cash is now following its historic past, and the underlying bearish trail is something that was triggered in the midst of Bitcoin’s bullish Q2 period.

Ethereum performed better in Q2 than BTC USD

The report further added that amidst Bitcoin’s stronghold, Ethereum consistently out-marched BTC with a quarterly return of approximately 70 percent in the charts. Major factors behind ETH’s rally has been down to the growth of DeFi and the anticipation surrounding Ethereum 2.0.

Now, with the commencement of Q3 2020, it will be interesting to see the development of the crypto market over the next three months; whether the bearish grip is broken towards the end of the year or not.

Cheaper T19 Bitcoin Miner Launched Bitmain to Recoup Lost Market Share

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On June 1, giant mining equipment manufacturers Bitmain announced the launch of the cheaper T19 Bitcoin miner in a bid to reclaim its lost market share. The new Antminer T19 has a hash rate of 84 terahash per second (TH/s) and power efficiency of 37.5 joules per terahash (J/TH).

The new model was designed after the cost-effective Antminer S19 Bitcoin miner, but only cheaper. The S19 which comes with a computing power of 95 TH/s, with a market price tag of $1,785. On the other hand, the cheaper T19 Bitcoin miner costs slightly less at  $1,750. According to the announcement:

“The Antminer T19 is housed with the same generation of custom-built chips found in the Antminer S19 and S19 Pro, ensuring capable and efficient operations for mining cryptocurrencies.” 

Cheaper T19 Bitcoin miner available from June 1

As per the international Bitcoin mining network, F2pool, the cheaper T19 Bitcoin miner will generate up to $3.17 in daily profits. In contrast, the efficient S19 model can generate up to $3.96 based on the expense of $0.05 per kilowatt per hour.

Moreover, the new T19 model went on sale on June 1, with the maximum restriction of two miners each to each purchaser. This limit is put in place to avoid stockpiling and to enable individual buyers to purchase mining equipment as per the company. Additionally, the latest model will be shipped between June 21 and 30 according to Bitmain.

The latest model is more effective than its predecessor the T17 model, which has declined at a staggering rate of  20 – 30 percent together with the Antminer S17. The more common failure rate is basically 5 percent. The new cheaper T19 model comes with an ‘upgraded firmware’ seemingly to enable “faster start-up speeds.”

Bitcoin Halving forced Bitmain’s hand

Furthermore, the new cheaper T19 Bitcoin miner comes after Bitcoin’s May 11 rewards halving, which slashed miners’ rewards by half to 6.25 BTC per block. The halving event has resulted in most miners shutting down shop and look for more cost effective mining equipment 

Additionally, Bitmain has lost its market share to upcoming rival Microbt. As per data by Coinshares, the Beijing-based mining giants gave up at least 10 percent of the market share to Microbt back in 2019.

Cost of Bitcoin Transactions Drops by 50% as The Network Recovers Post-Halving

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Transaction costs for Bitcoin have dropped by 50 percent within five days as the pile-up of transactions the Bitcoin Network has started to reduce. This is a quick reversal for Bitcoin, which saw transaction fees rise by more than 2,000 percent in 2020 alone.

According to data from Bitinfocharts, the average bitcoin transaction cost has plummeted by 53 percent. The average bitcoin transaction fell from $6.64 to $3.06 in five days. See the following chart.

 

Cost of Transacting Bitcoin

Drop in number of transactions brought down the Bitcoin transaction costs

The abrupt drop in bitcoin transaction fee follows a sharp fall in the number of unverified transactions accumulated in the Bitcoin mempool (where unverified transactions are held awaiting network confirmation).The Bitcoin mempool can be measured in raw figures or in megabytes of data.

Cost of Transacting Bitcoin

The number of bitcoin transactions sitting in the Bitcoin mempool have reduced by a massive 71 percent over the last five days, as per Blockchain.com data. Moreover, despite the substantial reduction in the number of clogged transactions, the size of the Bitcoin mempool remains significantly high.

Low BTC transaction rate

Currently, the Bitcoin mempool is clogged with 60MBs  of transactions compared to its previous high of 90MBs on May 20. Given that the Bitcoin Network produces ten blocks every ten minutes, the Bitcoin mempool could dwindle in just over 10 hours.

Cost of Transacting Bitcoin

Overall, the number of Bitcoin transactions has fallen drastically. The data by Blockchain.com assumes a low bitcoin transaction rate. In fact, since May 11, when the block rewards halving even took place, the number of bitcoin transactions have dropped by 37 percent. As per data shared by Bitinfocharts. Although the cost of transacting bitcoin is dropping, it is not a good sign when the number of transactions is decreasing as well.