spot_imgspot_imgspot_img

What will be the Price Impact of the Bitcoin Halving Event?

  • Halving is generally considered positively because it is believed to increase the potential scarcity of BTC and support supply-demand dynamics.
  • Bitcoin halving occurs every four years or every 210,000 blocks. During this event, block rewards for BTC mining are reduced by 50%.
  • Duong pointed out that the upcoming halving event will be accompanied by an increase in global liquidity, which will obscure the clear impact on Bitcoin’s price movement.

Coinbase, the largest cryptocurrency exchange in the United States, discussed the price impact of the Bitcoin Halving event in a published report.

What Will Be the Impact of Bitcoin Halving?

A new report from Coinbase, the largest cryptocurrency exchange in the United States, revealed that the impact of Bitcoin halving on asset performance is still unclear due to various external factors influencing the market behavior.

Halving is generally considered positively because it is believed to increase the potential scarcity of BTC and support supply-demand dynamics. However, to understand the market’s reaction clearly, it is necessary to separate the movements of the US dollar, interest rates, and the effects of global liquidity.

Bitcoin halving occurs every four years or every 210,000 blocks. During this event, block rewards for BTC mining are reduced by 50%. The first halving occurred in 2012, and the fifth halving is expected to take place between April and May 2024. The upcoming halving will reduce BTC’s block rewards from 6.25 BTC to 3.125 BTC.

David Duong, the Head of Institutional Research at Coinbase, explained in the report that evidence of the market’s reaction is still limited due to only three halving events occurring, as they all coincided with significant monetary and financial developments.

In 2012, the Federal Reserve Board began purchasing mortgage-backed securities and long-term Treasury bonds for the third round of quantitative easing (QE3). When the second halving occurred in 2016, Brexit caused financial concerns in the European Union and the United Kingdom, leading to increased BTC purchases. In 2020, during the third halving, central banks and governments responded to the COVID-19 pandemic with “extraordinary stimulus measures,” increasing global liquidity.

Increase in Global Liquidity Can Obscure Price Movement

Duong, the Head of Institutional Research at Coinbase, emphasized that eliminating the impact of global liquidity on Bitcoin’s price movement would provide a clear picture of the asset’s performance in different economic regimes.

Highlighting the approaching next halving, Duong stated that the increase in current global liquidity would obscure the clear impact on Bitcoin’s price movement, as the crypto market has been monitoring global liquidity movements since the negative market events in May-June 2022.

The Coinbase research head added, “We believe that the next Bitcoin halving could have a positive impact on the token’s performance. However, limited supporting evidence indicates that this relationship is still somewhat speculative.”

Don't forget to enable notifications for our Twitter account and Telegram channel to stay informed about the latest cryptocurrency news

spot_imgspot_imgspot_imgspot_img

Latest News

BlackRock’s iShares Bitcoin Trust Skyrockets to $10 Billion AUM, Marking Historic ETF Milestone

This article explores the remarkable achievement of BlackRock's iShares Bitcoin Trust (IBIT) reaching $10 billion in assets under management (AUM), reflecting growing institutional interest and trust in cryptocurrency investments.

Bitcoin Futures Open Interest Hits Record High, Signaling Strong Market Sentiment

This article delves into the recent surge in Bitcoin futures open interest, showcasing increased market activity and the implications of speculative buying on price movements.

Bitcoin Enters Bull Market with Predictions of 10-Month ‘Face Melting FOMO,’ Says Analyst PlanB

This article explores the latest Bitcoin bull market forecast by analyst PlanB, the implications of the stock-to-flow model, and the role of new Bitcoin ETFs in shaping investor interest and market dynamics.

Bitcoin Eyes $70,000 Milestone: Bloomberg’s McGlone Predicts Shift from Gold to Crypto

As Bitcoin approaches the $70,000 mark, Bloomberg's Mike McGlone forecasts a pivotal transition in investment from gold to cryptocurrency, signaling a transformative phase in asset allocation.

Can XRP Price Reach $1? Noted Analyst Reveals Prediction!

Ripple's XRP token is trading below $0.60; what will be the next target for the XRP token? Current predictions!
spot_imgspot_imgspot_imgspot_img

PRO Analysis

Ethereum Breaks $3K as Rally Continues: What’s Next for ETH?

This article dives into Ethereum's recent surge past $3,000, analyzing the technical indicators and market dynamics driving its ascent and future prospects.

Will Bitcoin Rise To $50,000? Current BTC Analysis

Bitcoin is trading at $48,400 and may rise to $50,777 if it closes above $48,200. However, caution is advised in the range of $50,777 - $52,000. Corrections are common in the crypto market, so careful consideration is necessary before spot investments.

Where is the Solana Rise Target? Current SOL Analysis!

Solana is trading near the $108 resistance on the 8-hour chart, with a potential target of $111.84 if it surpasses this level. However, caution is advised in the $111.84 - $117.20 resistance range on the 6-hour timeframe.

Medium Term Ethereum Technical Analysis! What Awaits Its Investors?

When examining the medium-term technical chart of Ethereum, strong buying pressure is observed, pushing the price up from the $2139 support to the $2350 region. However, for the price to sustain its upward movement, it needs to surpass the $2407 resistance.

Can Bitcoin Fall To $35,000 Levels? Current BTC Analysis

When examining Bitcoin's 5-day technical chart, the analysis from January 18 is ongoing, indicating a continued downward movement from the $48,189 level. Bitcoin needs to close 5-day candles above the $44,200 resistance to gain momentum for an upward trend. 
Celal Mutlu
Celal Mutluhttps://coinotag.com/
Celal Mutlu is a young Satoshi reflection at the age of 21. His favorite characters are CZ and Vitalik, and he has a great sense of humor. Celal is a keen follower of developments in the world of cryptocurrency and keeps up with the latest news and trends.
spot_imgspot_imgspot_imgspot_img

BlackRock’s iShares Bitcoin Trust Skyrockets to $10 Billion AUM, Marking Historic ETF Milestone

This article explores the remarkable achievement of BlackRock's iShares Bitcoin Trust (IBIT) reaching $10 billion in assets under management (AUM), reflecting growing institutional interest and trust in cryptocurrency investments.

Bitcoin Futures Open Interest Hits Record High, Signaling Strong Market Sentiment

This article delves into the recent surge in Bitcoin futures open interest, showcasing increased market activity and the implications of speculative buying on price movements.

Bitcoin Enters Bull Market with Predictions of 10-Month ‘Face Melting FOMO,’ Says Analyst PlanB

This article explores the latest Bitcoin bull market forecast by analyst PlanB, the implications of the stock-to-flow model, and the role of new Bitcoin ETFs in shaping investor interest and market dynamics.