The previous Bitcoin halvings have all ushered in a violent bull market, so we naturally combine Bitcoin halving with Bitcoin bull market! But everyone must have an expectation that there is no evidence that Bitcoin halving and bull market are necessarily related!
November 2012: Bitcoins per block reduced from 50 to 25.
July 2016: Bitcoins per block reduced from 25 to 12.5.
May 2020: Reduced from 12.5 bitcoins per block to 6.25.
I have mentioned the different issues in my previous article, and I will repeat them here:
1. Miners
The increase in mining costs, the decrease in block reward income, and the miners selling their inventory may lead to a decline. Therefore, it is very important to stabilize the income of miners. In the short term, it can avoid some declines in the secondary market. In the long run, it is beneficial to maintain the development of the Bitcoin ecosystem and ensure the security of the network!
However, for this halving, the impact will be relatively small. This is mainly because with the development of inscriptions and Bitcoin ecology, the data on the Bitcoin chain has exceeded that of Ethereum. During the previous period when inscriptions were popular, 20% of miners’ income came from inscriptions. The NFT transaction volume of Bitcoin exceeded that of Ethereum! Even with the current rune protocol, it can be speculated that there will be more on-chain behaviors in the future, and NFT will also have amazing transaction volume!
ETF approval
Unlike in the past, the narrative about ETFs was submitted but not implemented. Currently, both BlackRock and Hong Kong ETFs have been implemented. Bitcoin’s recognition by the mainstream market has a certain positive significance for the secondary market. There is a data that says: the funds that flowed in within 15 days after the ETF was approved have already absorbed the selling pressure of Bitcoin within three months after the upcoming halving! Therefore, the approval of the ETF has well absorbed the pressure of miners’ selling! It also provides traditional funds support for the subsequent rise!
Impact on subsequent ups and downs
You can look at the projects of the BRC20 fair launch. Either there is strong FOM among retail investors, which keeps pushing up the price, or the price falls below the issue price as soon as it goes online, leaving no time and space for the bottom to accommodate big money!
The market is not stable now. Everyone has a lot of projects, and exchanges don’t accept each other. Either they are doing inscriptions or rushing depin. Even now many players are rushing runes. Then you will find that most of those who are doing inscriptions and rushing runes are the same group of people. So it is still a stock game. Many people don’t understand how to buy coins, let alone this protocol or that protocol! Before the market stabilizes, or before big funds come in, it must still be a stock game. What we expect more in the future is the narrative that attracts more off-site funds, such as rwa, ai, etc., which will provide a strong foundation for the bull market after the halving!
The impact of Bitcoin halving on the NFT market
The current transaction scale has far surpassed that of Ethereum, and the Bitcoin network is becoming the new center of NFT development. The average daily minting volume of Ethereum NFT is declining significantly, from 300,000 at its peak to less than 20,000. Some NFT assets with large-scale data attributes are being transferred from the Ethereum mainnet to other L2s.
There is also a clear trend of NFT assets with strong financial attributes moving from Ethereum to the Bitcoin network. Some people say that issuing such NFT assets on the Bitcoin network is becoming the consensus direction for a new round of asset issuance. We can boldly speculate that as the climax of the bull market approaches, the NFT ecosystem may usher in a wave of explosive growth!
The impact of Bitcoin halving on DeFi
The reduction in Bitcoin issuance rate may also affect its availability on decentralized exchanges and lending platforms, where Bitcoin often serves as collateral for various financial activities. It may also affect lending rates, liquidity pools, and liquidity mining strategies in the DeFi ecosystem.
Every time Bitcoin is halved, it will become the mainstream focus, even if it is only for a short while, and major media will report on this event. Just like the topic we are talking about, it can also inspire innovation in DeFi.
Summarize:
This halving is different from the previous ones in that it effectively supports Bitcoin to stand at a new height, and this height must be the beginning of Bitcoin breaking through new highs.
The current market is unstable and it is basically still a game of stock. We try to avoid leverage and contract trading to save chips for this bull market.
