Bitcoin Halving: What Investors Need to Know

The upcoming Bitcoin halving is different. Once celebrated only by early enthusiasts, it's now embraced by big institutions. As a technical event occurring roughly every four years, it cuts Bitcoin's supply in half, creating scarcity akin to digital gold. Historically, it precedes a new cycle and bull run, but this time, Bitcoin has already surpassed previous cycle highs.

What's Happening?

The halving cuts miner incentives by half every four years. Miners verify transactions, and their rewards decrease, reducing Bitcoin's supply. The event may not trigger immediate market action, but over time, the reduced supply could impact prices positively.

Market Impact Now and Later

While past halvings led to soaring Bitcoin prices, each cycle's returns have diminished. This year, however, new demand from Bitcoin ETFs could reverse this trend, potentially driving prices higher even before the halving. Demand growth seems to be the key driver for price increases post-halving.

Conclusion

Despite diminishing returns from halving to halving, the advent of Bitcoin ETFs could change this pattern. New demand may outweigh the planned supply shock, potentially leading to higher prices. The once-significant influence of halving on prices seems to be diminishing, with demand growth becoming the primary driver for higher prices.