With each passing moment, the Bitcoin network edges closer to its upcoming halving, the fourth in its history. This significant event is predicted to unfold in just a few hours, leaving the digital air thick with excitement and expectation.
The built-in event reduces by half the number of fresh Bitcoins awarded to miners for processing transactions on the blockchain. Some believe this could spark another Bitcoin boom, but seasoned analysts advise against excessive enthusiasm.
Bitcoin Rewards Slashed, Not Supply
Before the upcoming halving event, there are many misunderstandings circulating. Binance‘s co-founder, Changpeng Zhao, has explained that this halving is not analogous to a stock split, as it does not increase the overall number of coins in existence.
Instead, the Bitcoin supply is decreased through halving, leading to a tighter market and fewer new coins being added. This scarcity is an essential feature of Bitcoin’s structure, modeled after scarce resources such as gold.
For those who are not familiar, a stock split is an action taken by a company to increase the number of its outstanding shares. This is accomplished by dividing each existing share into multiple parts, resulting in more shares being available. Although both a stock split and a halving adjustment affect supply and potentially inflation, their purposes are quite different.
Someone asked me if bitcoin halving is like a stock split… We are still early. (Answer is no)
Happy halving!
— CZ BNB (@cz_binance) April 19, 2024
Past Performance Not A Guarantee
History provides an intriguing peek into the past. The last three splits in Bitcoin’s price occurred alongside major price spikes. After the 2012 split, Bitcoin experienced an astonishing rise of over 9,500%.
After the 2016 reduction by half (halving), Bitcoin experienced a remarkable surge of around 3,000% in the subsequent year. Nevertheless, experts caution against relying solely on past patterns. The current market scenario and investors’ emotions play crucial roles in shaping price trends.
Bitcoin Halving: Analyst Predictions
Anonymous analyst known as Plan B, a strong advocate for the S2F model in the stock market, firmly trusts that the impact of Bitcoin’s halvings is bullish.
He argues that the upcoming event will follow the established pattern, driving prices upwards.
In my opinion, the upcoming bitcoin halving won’t vary significantly from past events:
— PlanB (@100trillionUSD) April 17, 2024
According to Ramani Ramachandran, the CEO of Router Protocol, there is a strong expectation for institutional investment during this cryptocurrency halving. This institutional demand could even outshine the retail investor interest from previous halvings. The combination of these two factors creates an exciting scenario to watch unfold.
In contrast to some, such as Kadan Stadelmann, the CTO of Komodo Platform, others hold a more complex perspective. They recognize past price patterns but place greater significance on the increasing presence of institutional investors, which could lead to further price increases in the future.
Early Signs Of A Price Surge?
The market is subtly indicating its forecasts as Bitcoin’s price increases by almost 5% within the past day before the halving event. This surge could be due to investors buying in advance based on expectations of decreased supply or a revived belief in Bitcoin being the foremost cryptocurrency.
In a recent poll, over two-thirds (69%) of institutional investors and wealth managers indicated they plan to boost their Bitcoin investments in response to the halving event, whereas a mere 2% signaled they will decrease their investments.
The Bitcoin halving is an important milestone in the cryptocurrency’s past, and its future implications are certain to spark discussions for potentially extended periods.
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2024-04-19 22:11