Many people in the currency circle know that $BTC will be halved for the fourth time in history this year. According to historical rules, it is inevitable that currency prices will fluctuate significantly before the halving and in the months after.
So, what impact will the Bitcoin halving event have? Let me analyze it for you:
1. Reduced supply
The Bitcoin halving causes the new supply of BTC to decrease. This also means that the number of new Bitcoins added every day has shrunk, increasing the scarcity of Bitcoin, which may have a certain impact on the price.
2. Price fluctuations
Historically, Bitcoin’s halvings have typically been accompanied by price increases. This is because a reduction in supply could lead to increased investor demand for Bitcoin, pushing the price higher. However, price increases are not a given and market reaction depends on a number of factors.
3. Miner incentives
The halving event will affect the income of Bitcoin miners because the reward they receive for each block they mine will also be halved, which may lead to the closure of some unsuccessful mining farms, but it may also prompt miners to adopt more efficient mining equipment and methods.
4. Network security
Bitcoin’s halving event may have an impact on the security of the network. As rewards are halved, some miners may quit, reducing the total computing power of the network. However, over time, new mining rigs may emerge, rebalancing the security of the network.
5. Investor sentiment
Bitcoin’s halving event usually triggers widespread market attention and may cause investor sentiment to fluctuate. Such sentiment swings can produce short-term fluctuations in prices. The next Bitcoin halving is expected to occur on April 22, 2024, when the number of blocks will reach 740,000. Bitcoin block reward will drop from 6.25 BTC to 3.125 BTC.
Halving is an inherent mechanism of Bitcoin that is designed to slow down the supply of Bitcoin so that its total amount gradually reaches a maximum limit. Its purpose is to increase the scarcity of Bitcoin by gradually reducing the supply of new Bitcoins, similar to limited resources such as gold.
This design helps curb inflation and allows the total supply of Bitcoin to gradually reach its limit in the future, eventually reaching 21 million BTC. This is one of the core economic principles of Bitcoin.
In addition to Bitcoin, some well-known crypto assets will also start halving mode in 2024. This move is designed to shape the scarcity of assets and reduce liquidity, which is expected to promote a new upward cycle in currency prices.
$BCH (Bitcoin Cash): Expected halving date is April 7
As a forked project of the Bitcoin mainnet, BCH has a similar production reduction model to Bitcoin. However, since the bull market in 2017, BCH's voice has gradually faded out of the crypto circle. Therefore, the market is still waiting to see whether BCH's production reduction can boost prices.
$BSV (Bitcoin Original Vision): Expected halving date is April 12
BSV is committed to realizing Satoshi Nakamoto’s original vision of creating a global decentralized payment system. However, BSV was delisted by Coinbase at the beginning of this year. Before that, BSV was still involved in a series of negative news, which brought certain negative pressure on asset prices.
DASH (Dash): The expected halving date is July 7
In the previous rounds of bull markets, DASH once occupied an important position and became an important benchmark for the landing of crypto assets in real-world consumption scenarios. However, under the latest NFT and DeFi gameplay, DASH has suffered a huge impact and gradually faded out of the crypto circle.
$ETC (Ethereum Classic): The expected halving date is July 21
ETC aims to become a decentralized, safe and reliable smart contract platform, but its influence is far less than that of Ethereum itself.
ZEC (privacy coin): Halving date is November 20
ZEC is committed to providing highly confidential online payment solutions. Privacy projects have gradually stirred up the market in recent years, so ZEC’s follow-up trend deserves attention.
ZEN (Zcash): Halving date is December 8
ZEN uses zero-knowledge proof technology and aims to provide an online payment solution with higher confidentiality.
Taken together, most of the encrypted assets that will be halved in 2024 use the POW mechanism, and privacy assets also account for a certain proportion of them. The unpredictable future market conditions require more detailed analysis of the criteria for judging these assets to ensure absolute safety.
In addition to the above halving events of mainstream cryptocurrencies, I would like to share with you some of my personal insights on the market:
1. Grayscale is facing ETF redemption pressure. From the engine of the last bull market to the current bull market smasher, it has a suppressive effect on prices;
2. The inflow of Bitcoin ETF funds, including BlackRock, Invesco, and others, was almost offset by the outflow of Grayscale;
3. In order to prepare for a new round of bull market, miners will dispose of assets and purchase new mining machines;
4. The cost of mining machines after the BTC halving will be around 40,000, which will have a certain supporting effect on the market;
5. The Bitcoin halving is coming in April. Large long-term holders will only accumulate coins at this stage and will not sell them. The certainty of the halving cycle is strong.
Therefore, our recent market prices often fall at night and rise during the day. The sustainability of the copycat market is also relatively poor, and funds rotate rapidly. Those who have made profits after rising today may take back their profits tomorrow. Personally, I think there is no need to be overly pessimistic about the current market. The new cycle opportunity of BTC halving is just ahead, and it won’t be long. Let’s wait for the market’s turning point signal to appear.
