Bitcoin's Surging Momentum and the Impending Halving

Bitcoin’s Surging Momentum and the Impending Halving

Discover how Bitcoin's halving momentum is reshaping the cryptocurrency landscape. Learn more about the Bitcoin halving phenomenon and its impact on the market.
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Bitcoin is currently going through its best moment, and the craze for this asset is consolidated, which, since the beginning of the year, has registered significant gains. In the last few hours alone, the price of Bitcoin (BTC) surpassed several additional milestones in Asia, surpassing $57,000 for the first time since November 2021. An exponential rise of almost 11% in the last 24 hours demonstrates the explosion of this cryptocurrency.

Bitcoin's Surging Momentum and the Impending Halving
Bitcoin Halving Momentum
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Consolidation of Momentum

The rally began on February 26 in the US, when Bitcoin surpassed $53,000 and later climbed to $54,000. This surge led to considerable activity in spot Bitcoin ETFs, with Grayscale’s ex-GBTC pool recording a record trading volume of $2.4 billion. Nonetheless, GBTC consolidated the smallest one-day outflow of Bitcoin, with just 921 tokens, figures not seen in the spot ETF launch since Jan. 11.

Bitcoin is approaching an astonishing record

The cryptocurrency news is up more than 8% in the last 24 hours and has surpassed the $60,000 mark, reaching $63,000 per unit. As such, it is only $5,500 away from its all-time high.

On the eve of the halving, strong demand for the gains generated by the cryptocurrency market live in recent days motivated its price to rise. All this shows, according to experts, that institutions have a strong bullish sentiment, as they are the main investors in these assets and are afraid of missing out on an opportunity.

In addition, there is increased institutional interest from U.S. exchange-traded funds (ETFs), issued by several reputable asset managers, which added more than 300,000 BTC units to their treasuries. Thus, only IBIT broke a new record with $1.3 billion in volume traded since its approval on January 11.

 Approaching Remarkable Records

As has happened with Ethereum, Bitcoin is assuming that platforms that trade these assets, such as Coinbase, touch their all-time highs in more than three years (it exceeded $200 per share for the first time in three years). Stock market analysts are now wondering if the 2021 record will actually be surpassed all-time.

It is now expected to reach the all-time high recorded in 2021, when it reached $68,500, as the constant exponential rises invite optimism and expansion for other companies in the sector.

Bitcoin's Surging Momentum and the Impending Halving
Bitcoin Halving Momentum

Institutional Interest Fueling Bullish Sentiment

The causes of this new boom for Bitcoin are clear. First, in January, several ETF funds that replicate the value of Bitcoin were launched by large investment banks. In this way, thousands of investors were able to save in the cryptocurrency without the need for a specific wallet or opening an account on an exchange dedicated to the business.

Since January 2023, the price has risen from $16,500 to over $45,000, based on CoinMarketCap data from early January 2024. It is expected that in the coming months there will be further changes in the price and that in April a new halving will arrive, the process by which the number of new Bitcoins given to miners who have added new valid blocks on-chain is halved.

It is impossible to know if we are facing a one-off Bitcoin bubble or the final push, so mining investors will have to stay alert to the movements and fluctuations of the crypto news market.

The emergence of a new halving

The date that analysts estimate is April 23, 2024. Halving is a phenomenon that usually occurs every four years and implies that the volume of bitcoin issued from that moment on is half of the current one. If there is a reduction in supply in the midst of an increase in demand, it will have a direct impact on the current price index.

The aim of halvings is to limit the supply of new Bitcoins in circulation, contributing to a fully deflationary Bitcoin model and generating, as a consequence, a significant increase in Bitcoin’s value over time. It’s all part of the economic and monetary design of cryptocurrency, which emulates some of the properties of gold (scarcity and resistance to inflation as a value asset).

The keys to the Bitcoin halving

The halving is a scheduled event that halves the reward miners receive for validating and adding new blocks to the chain, affecting the issuance rate of new crypto share price until the network has produced the scheduled total.

The block mining reward started at 50 bitcoins in 2009, with the first halving being in 2012, when it was reduced to 25 bitcoins. The second halving came in 2016, reducing the reward to 12.5 per block, and the third in May 2020, when it dropped to 6.25 per block. They are part of Bitcoin’s basic mining algorithm. If the new halving is applied in 2024, miners will receive 3,125 BTC per block mined.

Dozens more halving operations are expected to emerge until the year 2140, when 21 million halvings will be issued, according to the protocol that Bitcoin has pre-established. It should be noted that as of January 2024, there were more than 19.59 million BTC in circulation (92% of the total issuance), according to data from Messari.io.

According to data from the Blockchain Observatory, halving is essential to Bitcoin’s economic dynamics, as it allows you to control its supply and make it a scarce commodity. Hence the importance of establishing safety and full competition in mining while offering a more efficient and sustainable alternative.

As the reward for miners shrinks, only the most efficient with the lowest electricity costs will continue to mine, so it will be important to control Bitcoin’s supply to ensure a more secure and robust network.

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Lineesh Kumar
Lineesh Kumar

Expertise in digital marketing

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