Bitcoin Halving and Hong Kong’s Action: A New Chapter in Crypto
Bitcoin, the world’s first and most popular cryptocurrency, is once again in the spotlight as it approaches its next halving event. Meanwhile, Hong Kong is making significant strides in the crypto space, with the likely approval of its first set of applications for spot-bitcoin exchange-traded funds (ETFs).
The $BTC Halving
The Bitcoin network is programmed to halve the reward given to miners approximately every four years, an event known as "halving". This mechanism ensures that the supply of Bitcoin is kept in check, preventing inflation. The upcoming halving, expected to occur in April 2024, will see the reward drop from 6.25 BTC per block to 3.125 BTC.
Historically, halving events have been bullish for Bitcoin. They decrease the supply of new bitcoins, making buying more expensive. With demand usually remaining steady, the halving has usually preceded some of Bitcoin’s largest runs. As we approach the 2024 halving, investors are shifting their focus to this event, drawing attention to BTC spot ETF flow data4.
However, it’s not all rosy. Recent reports suggest that BTC miners could face losses to the tune of $10 billion after the halving as mining rewards drop and mining costs increase5.
Hong Kong’s Leap Forward
In a significant development, Hong Kong is likely to approve the first set of applications for spot-bitcoin ETFs this week.
A total of four entities have submitted applications to launch the spot bitcoin ETFs in Hong Kong.
This move is expected to make the products ready to start trading in April.
The approval of these ETFs is expected to buoy the market, which had struggled after BTC dumped to lows of $62k over the weekend6. Estimates put the potential inflows at $25 billion worth of Hong Kong ETFs.
Conclusion
As the crypto world anticipates the Bitcoin halving and Hong Kong’s approval of spot-bitcoin ETFs, these events underline the growing acceptance and institutionalization of cryptocurrencies.
