What Set’s Bitcoin’s Imminent Halving Apart from Past Cryptocurrency Cycles

These halving events occur at intervals of every 210,000 mined blocks, approximately every four years, and will continue until the finite supply of Bitcoin has been fully mined.

Tracking the trend,

BTCUSD

typically exhibits
price gains post-halving, as suggested by past data. The forthcoming halving is expected to occur on April 19, as projected by investment service Swan Bitcoin.

This time around, the halving coincides with unprecedented factors affecting both the supply and demand sides of Bitcoin, says Cosmo Jiang, a portfolio manager at crypto asset management firm Pantera Capital.

From the demand side, the market has seen new avenues for Bitcoin investment with the introduction of exchange-traded funds (ETFs), which have seen a consistent influx of investments. In a historic move, the U.S. Securities and Exchange Commission
authorized 10 Bitcoin ETFs in January.

See Also: How Bitcoin ETFs are influencing cryptocurrency trading

With increased interest from institutional investors, Bitcoin’s value approached its historical peak not long before the halving’s projected date. The cryptocurrency has surged over 40% in value this year to about $62,600, inching closer to its record peak of $68,990 from November 2021.

The current upward trend deviates from the norm typically observed before a halving, which often sees Bitcoin exhibiting subdued performance during the preceding two to three months, as noted by Martin Leinweber, digital-asset product strategist at MarketVector Indexes.

Furthermore, the Bitcoin network has achieved heightened security compared to conditions during past halvings, asserts Adam Swick, Chief Growth Officer at Bitcoin mining firm Marathon Digital Holdings Inc.

MARA

Bitcoin’s total hash rate—a metric for the network’s computing power—reached a new zenith of 600 million terahashes per second in February, data from Blockchain.com shows.

This heightened security is reassuring as halving events may compel some miners to cease operations due to lower rewards, a concern Swick addressed.

While Bitcoin’s value usually benefits from halvings, the cryptocurrency’s price remains subject to significant volatility amid uncertain economic conditions. Investors currently are concerned about whether the progress in disinflation will continue and the timing of the Federal Reserve’s interest rate adjustments.

Michael Novogratz, CEO of Galaxy Investment Partners, recently mentioned in an interview with Bloomberg TV that while Bitcoin’s price could face “some corrections,” it is likely to rally to new highs thereafter.