Popular cryptocurrency analyst Benjamin Cowen is warning that Bitcoin (BTC) faces a perilous moment before it can embark on a bullish run that normally comes after a halving.

According to the popular crypto analyst, Bitcoin has displayed similar behavior in the months prior to previous halvings.

“I think Bitcoin will have one more scare later this year [or] early next year at the latest. Right before the halving basically, sometime before the halving where it will test people’s resolve.

We had the same thing in 2015, we had the same thing in 2019 and 2020. I assume we’ll have the same thing again.”

Cowen says that altcoins will be more severely affected than Bitcoin in case of a correction in the market.

“In a correction scenario, the lower liquidity assets would actually get hit a lot harder than the ones that have more liquidity.

When you have corrections on Bitcoin/US dollar [pair] during the pre-halving year, liquidity in the altcoin market dries up quite substantially.

And so whenever a correction were to occur, you would likely see altcoins go down on not only their US dollar pairs but also still on their Bitcoin pairs as well.”

According to Cowen, the market is currently in a Bitcoin season where the flagship crypto asset has so far outperformed major altcoins.

“We have, in fact, gone very deep here into Bitcoin season. So much in fact that over the last 60 days Bitcoin has outperformed every other cryptocurrency that’s in the top 50 [by market cap].”

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With the next Bitcoin halving less than a year away, it’s crucial to understand what it is and how it can impact the world’s flagship cryptocurrency.

Bitcoin was invented in 2008 by an unknown person or group of people using the name Satoshi Nakamoto. Bitcoin blockchain’s first block, referred to as “Block 0” or “Genesis Block,” was mined by Satoshi on January 3, 2009. At the start of Bitcoin, the initial block reward was set at 50 BTC, and since Bitcoin did not have any monetary value, Satoshi was the sole miner. However, in March 2010, the first Bitcoin exchange, BitcoinMarket.com, was established, resulting in increased interest in the digital currency. By the spring of 2011, Bitcoin’s value had exceeded $1.

Bitcoin halving is a critical event that happens every four years on the Bitcoin network. The next one is expected to take place in 2024, and it is essential to understand what it is, how it works, and its effects on Bitcoin’s price.

Bitcoin halving is a process in which the reward for mining Bitcoin transactions is cut in half. The reward is the amount of Bitcoin that miners receive for solving complex mathematical problems and adding transactions to the blockchain. Bitcoin was designed to have a limited supply, with only 21 million bitcoins to be mined. As of April 2023, over 18.7 million bitcoins have been mined, and the remaining number of Bitcoins is decreasing with each halving.

The first Bitcoin halving occurred on 28 November 2012, and the reward for mining was cut from 50 BTC per block to 25 BTC per block. The second halving occurred on 9 July 2016, reducing the mining reward to 12.5 BTC per block. The third halving happened on 11 May 2020, when the reward per block was reduced to 6.25 BTC.

Halving is an essential part of Bitcoin’s design as it helps control inflation and ensure the longevity of the Bitcoin network. Reducing mining rewards slows the rate at which new bitcoins enter circulation, making them more scarce and valuable. As the mining reward reduces, the cost of mining Bitcoin increases, making it more challenging to earn bitcoins.

The first halving in 2012 saw the price of Bitcoin increase from around $11 to over $1,000 in a year. The second halving in 2016 also had a similar effect, with Bitcoin’s price increasing from about $650 to nearly $20,000 in less than two years.

The third halving in May 2020 saw the price of Bitcoin increase from around $8,500 to over $60,000 in less than a year.

The next Bitcoin halving is expected to occur in 2024, where the mining reward will be reduced to 3.125 Bitcoins per block. The halving event is expected to reduce the supply of newly mined Bitcoins, increasing Bitcoin’s price.

However, as with previous halving events, the exact impact on the price of Bitcoin is uncertain and can be influenced by various factors.

Below we look at some of these factors:

Market Sentiment: Market sentiment is one of the most significant factors influencing the impact of Bitcoin halving. If investors believe the halving will increase demand for Bitcoin due to the reduced supply, then the price will likely rise. On the other hand, if investors are bearish on Bitcoin, they may sell their holdings, causing the price to fall.

Miners: Miners play a crucial role in the Bitcoin network. They verify transactions and create new blocks by solving complex mathematical problems. After each halving event, the mining rewards are reduced, which means that some miners may find it less profitable to continue mining. This can lead to a decrease in the network’s overall hash rate, which can, in turn, slow down transaction processing times and lead to a decline in the price of Bitcoin.

Competition: Bitcoin is not the only cryptocurrency in the market. If investors believe that other cryptocurrencies are better investments than Bitcoin, then the impact of halving on the price of Bitcoin may be minimal.

Adoption: The adoption of Bitcoin has been growing steadily over the years. However, the adoption rate can vary significantly depending on factors such as government regulations, media coverage, and public perception. If there is a surge in adoption after the halving, it could increase demand for Bitcoin, which can drive up the price.

Economic and Political Events: Bitcoin is often considered a hedge against economic and political instability. If major economic or political events occur around the time of halving, it can influence the price of Bitcoin. For example, during the COVID-19 pandemic, Bitcoin’s price initially fell but later rebounded strongly as investors turned to alternative investments.

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What Is Bitcoin Halving?

A bitcoin halving is an event where the reward for mining new blocks is halved, meaning miners receive 50% fewer bitcoins for verifying transactions.

After the network mines 210,000 blocks—roughly every four years—the block reward given to Bitcoin miners for processing transactions is cut in half. This event is called halving because it cuts the rate at which new bitcoins are released into circulation in half.

This rewards system will continue until about 2140, when the limit of 21 million Bitcoin is reached.

In 2009, the reward for each block in the chain mined was 50 bitcoins. As of April 2023, about 19.3 million bitcoins were in circulation, leaving just around 1.68 million left to be released via mining rewards.

The next bitcoin (BTC) halving is likely to occur in April 2024 and could have a dramatic impact on the cryptocurrency’s price.

Bitcoin halvings are important events for traders because they reduce the number of new bitcoins being generated by the network. This limits the supply of new coins, so prices could rise if demand remains strong.

When Did the Bitcoin Halvings Happen?

There have been three halvings as of April 2023:

Nov. 28, 2012, to 25 bitcoins

July 9, 2016, to 12.5 bitcoins

May 11, 2020, to 6.25 bitcoins

Why Are the Halvings Occurring Less Than Every 4 Years?

The Bitcoin mining algorithm is set with a target of finding new blocks once every 10 minutes. Some blocks take more than 10 minutes; some take less. This can decrease or increase the amount of time it takes to reach the next halving goal. For example, if blocks consecutively average 9.66 minutes to mine, it would take about 1,409 days to mine the 210,000 blocks required (four years is 1461 days, including one day for a leap year).

What Happens When There Are No More Bitcoins Left?

It is often thought that in 2140, the last bitcoin will be mined. However, if the reward is halved every 210,000 blocks, there will always be a mining reward—assuming the blockchain still exists at that time. The reward will just get smaller and smaller every time there is a halving if the practice continues.

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Bitcoin price predictions are always a hot topic, and with current market conditions, it's no surprise that many are wondering if BTC could hit $50,000 by the end of 2023.

There are some factors that could contribute to a price increase in the coming months. First, the Bitcoin halving is scheduled for May 2024. This event, which occurs every four years, halves the number of new Bitcoins being mined. This can lead to a decrease in supply, which can push prices up.

Second, institutional investors are starting to pay attention to Bitcoin. In recent months, we have seen large companies like Tesla and MicroStrategy invest heavily in BTC. This could lead to more investment from other institutional investors, which could also push prices up.

Of course, there are also some risks that could prevent Bitcoin from reaching $50,000 by the end of 2023. One risk is that the broader market continues to fall, which would drag Bitcoin prices lower as well. Another risk is that governments could crack down on cryptocurrencies, which could also lead to lower prices.

Overall, the possibility of Bitcoin reaching $50,000 by the end of 2023 is certainly possible. However, there are also some risks that could prevent this from happening. Only time will tell if BTC can reach this level in the coming months.

It is not investment advice please make your own DYOR and stay SAFU

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