Is the Bitcoin Halving Already Priced In? What Impact Does the Halving Have on Prices? Analysts Explain
The entire crypto world is gearing up for the upcoming Bitcoin halving event.
This major event, which will take place around 8pm Turkish time (UTC+3) on April 20, is a programmed feature of the Bitcoin network that occurs approximately every four years, or every 210,000 blocks.
With the halving event, miners’ rewards will drop from 6.25 BTC per block to 3,125 BTC. This means that miners will receive 50% fewer Bitcoins for each transaction block they mine and add to the blockchain. However, they will continue to earn additional transaction fees for each mined block as usual. Halving events will continue until the last BTC is mined around 2140. From now on, miners will earn income solely from transaction fees.
Historically, Bitcoin halvings have been associated with significant fluctuations in Bitcoin prices. While not a direct causal relationship, these events usually precede major bull runs in the BTC market.
Whenever this event occurs, the question of whether the Bitcoin halving has been “priced in” is raised. However, there is one data point that suggests that this time it has been “priced in.”
Analysts David Duong and David Han said that this is the first halving cycle where Bitcoin has reached an all-time high before the halving, which may mean that experienced traders have already digested the halving effect.
However, the analysts added that there is still a widespread belief that the halving may push prices higher, which “could lead to higher prices.”
Bitcoin is closer to its all-time highs this time than previous halving events. However, analytics firm Kaiko noted that the approval of spot ETFs has led to a significant change in BTC supply and demand dynamics, which could affect prices during and after the halving.
“Overall, ETF inflows have been strong, which could indicate an immediate positive price impact as supply continues to decline,” said Kaiko analysts, adding:
“However, ETFs can also experience rapid outflows, which can increase selling pressure on the underlying asset during market stress. So far, we have only seen one week of net outflows, but this may change.””
*This is not an investment advice.
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