Bitcoin (BTC) will be ‘halved’ in mid-April 2024 – a four-year event that slashes Bitcoin mining rewards in half. That said, validating Bitcoin transactions get 6.25 BTC at present, which would go down to 3.125 BTC post halving.
The reward for mining a block of transactions started at 50 Bitcoins in 2009, dropping to 25 in 2012 and 12.5 in 2016. As a result, the ‘halving’ event creates practical difficulties for miners when half their income suddenly vanishes.
With the imminent Bitcoin halving setting up the grand chess game in the markets, “sentiments are bullish in the long term,” says Henry Robinson, Co-Founder and Head of Crypto of Decimal Digital Currency. However, he adds that the psychology around such a significant event can create major volatility.
Robinson started in the cryptocurrency industry by constructing a GPU mining ‘facility’ and has accumulated deep knowledge in the critical aspects of the mining business including heat management in data centers, energy infrastructure optimization, crypto-specific cybersecurity, among others.
Speaking with Cryptonews, Robinson noted that the price action of Bitcoin takes time as there would be exuberant bullish action, dramatic sell offs, or both, before and after the halving.
That said, once the dust settles, “we expect a continuation to new all-time highs and for Bitcoin to cross major milestones over the next two years on its path to greater integration with global finance,” he added.
The crypto executive answers to some of the key aspects of the pre and post Bitcoin halving trends.
Cryptonews: After each halving, Bitcoin has seen massive surges in the past, indicating the start of bull markets. What is your prediction on this year’s Bitcoin halving outcome?
Robinson: Bitcoin is now an important institutional asset unlike ever before. Bitcoin ETFs are booking 9-10 figure weekly net inflows and are approaching $60 billion of volume in less than two months making BTC ETFs among the most successful ETF launches ever. We’re seeing this accumulation begin to affect price already, and the post halving effect at current prices means about $700 million less of monthly new BTC supply soon. We expect new all-time highs in 2024.
Cryptonews: If we notice previous halvings, there has been a recurring trend analysis of Bitcoin. A notable price dips precedes each halving, for instance, in 2016 and 2020, pre-having corrections of 40.37% and a drop of 63.09% were noted respectively. Following this, there was a significant recovery in the crypto price post-halving.
Taking that into consideration, will there be a robust dip in the price in the coming days just before the halving? And would it be a wise decision to ‘buy the dip’ at that time?
Robinson: Leveraged traders tend to get wiped out when everyone believes profits are a sure thing, and sentiments are very bullish right now.
We wouldn’t be surprised to see a correction ahead of the halving that liquidates the more extreme bullish bets before an upward continuation, and would definitely call something like that a ‘buy the dip’ opportunity. We may also just see a continued uptrend, as buyers show no signs of stopping.
Cryptonews: Also, as the trend shows subsequent increases in Bitcoin prices following previous halvings, will there be a decrease in the magnitude of these increases moving forward?
Robinson: Mathematically, that is what we should expect. The supply constraining impact of the halving lessens each time from a BTC denominated perspective. However, the other half of the equation is the overall demand for BTC, which is currently at unprecedented levels. With Bitcoin inching closer towards acting as a global reserve asset, we are seeing a massive macroeconomic rebalancing into BTC coinciding with the imminent halving.
Cryptonews: The recent spot Bitcoin ETFs approval needs to be taken into account. The market is getting a lot smarter about pricing in the impact of each new Bitcoin event such as the ETFs’ approval.
Would this event have an impact on the upcoming Bitcoin halving?
Robinson: The BTC market is getting smarter, and deeper pocketed. All this new liquidity from ETFs is making BTC pricing more rational and thwarts market manipulation. More importantly, the Bitcoin ETFs have created a foot in the door to educate traditional asset managers about Bitcoin. They may have ignored it out of caution or due to regulatory constraints before, but now many are taking a closer look and will realize the incredible risk to reward ratio. Adoption is only getting started.
Robinson’s Bitcoin price predictions align with that of major industry players including recent anticipation from Ripple CEO Brad Garlinghouse. He predicted that recent conflux of events like Bitcoin halving and spot Bitcoin ETFs approval would drive the overall crypto market capitalization exceeding $5 trillion by the end of 2024.
Whatever the case, the market may need to brace for volatile short-term Bitcoin trading post the halving event, adds Robinson.
