The Bitcoin halving is arguably the most important event in the cryptocurrency industry, taking place every roughly four years (210,000 blocks). It aims to reduce the speed at which new BTC is being produced, which essentially reduces the pre-programmed inflation rates and ensures that Bitcoin mining will continue for many more years, even though more than 90% of the total supply has already been mined.
The next such event is scheduled to take place in early April 2024. Given the asset’s history of going on wild rides before, during, and after each of its previous three halvings, crypto analysts have begun speculating on what could transpire in the next year or so.
First Phases: Pumps and Dumps
Whether it’s the hype around the upcoming halving or the potential approval of the US’ first spot Bitcoin ETF (or maybe both), the fact is that BTC’s price has been on the run for the past few months. Just earlier this weekend, the primary cryptocurrency charted a 19-month peak at almost $45,000. Quite an impressive number, given the fact that the asset started the new year at around $17,000.
Popular crypto analyst going by the X handle Rekt Capital indicated that there might be retracements in BTC’s near future, but they could result in a “fantastic Return on Investment” should investors capitalize on them.
By relying on historical data, Rekt Capital suggested that BTC sees another rally approximately 60 days before the halving. This is typically followed by a “pre-halving retrace,” which takes place around the event. In 2016, BTC dropped by just under 40% and by 20% four years later.
Approximately 4.5 months remain until the Bitcoin Halving in April 2024
Historically, any deeper retraces that occur during this period tend to generate fantastic Return On Investment for investors in the several… pic.twitter.com/FxkOyEtXJT
Savvy investors use the aforementioned “pre-halving retracement” to stack Sats, but others’ faith might be quite different, Rekt Capital warned:
“Many investors get shaken-out in this stage due to boredom, impatience, and disappointment with lack of major results in their BTC investment in the immediate aftermath of the Halving.”
Once the dust settles, the halving is history, and the reaccumulation phase is complete, comes the sweetest part – the parabolic price increases.
Of course, history is no indication of future price movements. Nevertheless, BTC indeed skyrocketed months after each of the previous halvings and tapped new all-time highs within a year and a half. The last such example was in late 2021, when it touched $69,000. For reference, the third halving took place in May 2020.
SPECIAL OFFER (Sponsored)
Binance Free $100 (Exclusive): Use this link to register and receive $100 free and 10% off fees on Binance Futures first month (terms).
In a recent series of X posts, the head of Blockstream Adam Back said the largest by market cap cryptocurrency might surge to $100k before the 2024 halving.
According to the Blockstream CEO, Bitcoin (BTC) “will surely flip physical gold sooner or later” as the probability of this scenario is high enough for “this halving cycle.” In an X post on Sunday, Dec. 3, 2023 Back said he expects the top cryptocurrency to set a new all-time high at $100,000 even before the 2024 halving.
That’s what I’ve been saying, my bet is $100k befofe the halving.
As per Back, Bitcoin will benefit most from an intergenerational transfer of wealth as Gen X and millennials are likely to liquidate their portfolios in stocks, bonds and pension pots. He also noted that some people have already started “selling gold to buy Bitcoin,” opening doors for the cryptocurrency to reach the $1 million mark after the halving, which is expected to arrive in April 2024.
digital gold #bitcoin will surely flip physical gold sooner or later; and probably this halving cycle. so within a year or two. currently it’d take $700k/BTC but it maybe partially a substitute (some people start selling gold to buy #bitcoin crossing the market caps below that).
Meanwhile, Bitcoin surpassed the $41,000 mark for the first time since the Terra collapse in May 2022, putting 80% of the asset’s holders in profit. According to data from IntoTheBlock, Bitcoin’s profitability has reached a two-year-high, while the number of active BTC wallets registered a 6.4% rise — hiking from around 863,600 to 919,410 daily active addresses.
Analysts at Matrixport believe that the largest crypto can reach $60,000 by April 2024 and double that price mark by the end of 2024 as the market has entered a new phase of a bull run.
Galaxy Digital Founder and Chief Executive Mike Novogratz is also bullish on Bitcoin, saying the top crypto is poised to reach its old highs a year from now, should the U.S. Securities and Exchange Commission (SEC) give the go-ahead to spot Bitcoin exchange-traded funds (ETFs).
PlanB, the creator of the bitcoin stock-to-flow (S2F) model, has predicted that BTC’s price will remain above the $32,000 mark until the halving event in 2024.
According to a tweet, PlanB believes the leading digital asset’s price will remain in the $32,000-$64,000 range as it navigates through the pre-bull market phase until the next halving. He uses the S2F model to track bitcoin’s price based on its scarcity.
IMO bitcoin is currently in pre-bull market (yellow) and on track towards a full blown bull market (red, after halving unless earlier ETF approval).
Note I changed colors and stage names again, to better align with S2F model: 🟡pre-bull 🔴bull market 🔵pre-bear 🟢bear market pic.twitter.com/tmayjteVWv
The Bitcoin halving is an event that cuts BTC’s production and mining reward by half every four years or after 210,000 blocks. The mechanism increases the asset’s scarcity, thereby increasing its value. The fourth halving is expected to occur in April 2024, slashing the mining reward for each block by 50% to 3.125 BTC.
Historically, BTC has gone into a bull market mode after each halving event. PlanB’s market cycle model shows the asset is currently in a pre-bull market stage and on track to a “full-blown” bull market after the halving unless regulators approve spot Bitcoin exchange-traded funds (ETFs) earlier than projected.
PlanB’s tweet was a response to a remark about crypto community members being able to buy some BTC at $29,000 during the pre-bull season. With BTC currently trading around the $37,000 range, per data from CoinMarketCap, it remains to be seen if PlanB’s predictions will hold or if market dynamics will push the asset’s price downwards.
From $100K to $60K
PlanB’s recent prediction aligns with a scenario he outlined in April. The supposedly former Dutch institutional trader said BTC would trade around $60,000 to keep surging after the next halving.
However, the forecast does not align with his analysis in February 2022. PlanB stated that BTC would skyrocket to $100,000 by the end of 2023, according to the S2F model and logarithmic regression. With BTC’s price under $40,000, PlanB’s forecast may be considered inaccurate, following previous misses in 2021 and 2022. The market may be in for a surprise, and BTC may soar to unprecedented highs.
Meanwhile, PlanB predicted earlier this year that BTC could reach $1 million by 2025.
SPECIAL OFFER (Sponsored)
Binance Free $100 (Exclusive): Use this link to register and receive $100 free and 10% off fees on Binance Futures first month (terms).
The fourth Bitcoin halving is fast approaching and is estimated to be just 157 days away. In the meantime, there is a notable tightness occurring in the supply of Bitcoin that has now reached unprecedented levels in its history.
Glassnode’s latest report revealed that the ‘available supply’ is at historic lows, and rates of ‘supply storage’ surpass current issuance by a factor of up to 2.4x.
Tightness of Bitcoin Supply
The report talks about three pivotal stages, each providing valuable insights into the Bitcoin market. The initial one revolves around the ‘Available and Active’ Supply, which gauges the volume of actively circulating BTC available for trading.
Significant metrics in this category encompass Short-Term Holder Supply, which is currently at multi-year lows, standing at 2.33 million BTC. This cohort encompasses coins up to 155 days old, which statistically are the most likely to be spent.
Additional indicators of ‘hotter’ supply involve coins less than a month old (1.39 million BTC) and Futures Open Interest (0.41 million BTC), serving as a representation of ‘supply exposure’ in derivative markets. Collectively, this volume of ‘hot supply’ constitutes roughly 5% to 10% of the circulating supply actively involved in day-to-day trading.
Transitioning to the second stage, the measurement of rates of the ‘supply storage and saving’ phase revealed a decrease in available supply, indicating a noteworthy movement of coins away from exchanges and active trading, with a visible trend toward cold storage and long-term investor wallets.
The accumulation rates of all entities holding less than 100 BTC have exceeded new issuance since February 2022. This marked the longest and most sustained period in history.
The third stage zeroes in on analyzing the impact of capital flows on market valuation. Upon leveraging Realized Cap as a proxy to comprehend capital inflows, outflows, and the rotation of assets, it was found that Bitcoin supply and liquidity are fairly tight.
Bitcoin Halving Strategy
The halving stands out as one of the most anticipated events on the Bitcoin calendar. While it occurs every 210,000 blocks and slashes the rate of new coin issuance by 50%, the exact date and time are unknown due to the “natural variability and probabilistic nature of mining blocks.”
However, those who trade around these halving cycles potentially rake better returns than those who buy and hold. This was speculated by trading veteran Plan B, who recently noted that most Bitcoin price surges occurred in proximity to the three preceding halving events. According to his estimates, traders actively involved specifically during Bitcoin halving events might have experienced returns of up to 2,500%.
ALL bitcoin price increase occurred around the 3 halvings (H-6m / H+18m). Being in the market only in these 3 periods and out during the rest would have increased a $5 investment to $130k (purple line) instead of $37k buy&hold (blue line). NFA but fun to see what 4th halving… pic.twitter.com/TXQAszVZuz
The anticipation around the next BTC halving is palpable among investors and cryptocurrency enthusiasts alike. This process, which slashes the reward for mining Bitcoin transactions in half, is a pivotal event for the economy of the flagship cryptocurrency.
The next BTC halving date is not just a mark on the calendar; it’s a beacon for potential shifts in value and market dynamics, making the question “when is the next BTC halving” all the more critical for market participants. This comprehensive guide dives deep into the concept of Bitcoin halving, its historical impact, and what the future holds as we approach the next halving.
Bitcoin Network 101: The Basics Explained
The next BTC halving is a seminal event in the Bitcoin blockchain’s timeline, marking the point at which the reward for mining new blocks is halved. This event is not just a technical adjustment, but a significant milestone that historically has had profound implications for Bitcoin’s economics and market sentiment. Since the 2020 halving, miners have been receiving 6.25 Bitcoins (BTC) per successfully mined block, a reward that incentivizes the decentralized security of the network.
Looking ahead, the next BTC halving is projected to take place in early-to-mid 2024, a moment when the mining incentive will decrease to 3.125 BTC per block. This editorial delves into the intricacies of the next BTC halving, examining its anticipated date, the countdown to the event, and the broader implications for Bitcoin’s supply and valuation. We will also explore the historical context of past halvings to understand the potential future trajectory of Bitcoin as the reward continues to halve towards the smallest unit of a Bitcoin, one Satoshi.
The Bitcoin network is a triumph of cryptographic achievements and economic incentives that create a trustless system for value transfer. At its core, the network is a distributed database, known as the blockchain, that maintains a continuously growing list of transaction records hardened against tampering and revision. It employs a consensus algorithm called Proof of Work (PoW) to ensure network synchrony and security.
Bitcoin Mining 101
Miners, who are network participants with specialized hardware, compete to solve cryptographically hard puzzles. The solution to these puzzles requires a significant amount of computational power and energy. The first miner to validate a block of transactions by solving the puzzle is granted the right to append that block to the blockchain. This process is referred to as ‘mining’ a block, and it is through this mechanism that transactions are confirmed and the network is secured.
Bitcoin Mining
The reward for mining is twofold: miners collect transaction fees from each transaction included in the new block, and they are also awarded a block subsidy. This subsidy is composed of newly created bitcoins and is the mechanism through which new bitcoins are introduced into circulation. The block subsidy is predetermined by the Bitcoin protocol and undergoes a halving event every 210,000 blocks, which historically occurs approximately every four years.
The Bitcoin protocol is designed to be a self-regulating market system. The difficulty of the cryptographic puzzles adjusts approximately every two weeks (“Bitcoin Difficulty Adjustment”), ensuring that the time between each block found remains close to ten minutes, despite the fluctuating amount of computational power dedicated to mining. This difficulty adjustment is critical to the network’s stability and the predictability of Bitcoin issuance.
Definition And Rationale Behind BTC Halving
The BTC halving is an event that is deeply embedded in the Bitcoin protocol, serving as a deflationary mechanism by design. It is a deliberate algorithmic adjustment that occurs every 210,000 blocks, which historically equates to roughly every four years. During this event, the block subsidy awarded to miners for each block mined—comprising new bitcoins created and added to the circulating supply—is cut in half.
This halving process is a critical component of Bitcoin’s economic model, which is characterized by a capped supply limit of 21 million coins. The halving serves to enforce a synthetic form of inflation that is programmatically decreasing over time, ensuring that the issuance of new bitcoins follows a predictable deceleration curve akin to the extraction of a finite resource.
Key Narrative Behind The Bitcoin Halving
The rationale behind this process is multifaceted:
Controlled Supply Emission: By algorithmically enforcing a reduction in the rate at which new bitcoins are created, the halving event ensures that the total supply approaches the maximum cap asymptotically, a stark contrast to fiat currencies which can be printed without limit.
Inflation Hedge: The halving events contribute to Bitcoin’s proposition as a hedge against inflation. As the rate of supply expansion slows down, assuming demand remains constant or increases, the purchasing power of Bitcoin should, in theory, strengthen over time.
Security Incentives: The block subsidy is a critical incentive for miners to expend energy securing the network. As the subsidy decreases, the expectation is that a corresponding increase in the value of Bitcoin will offset the reduced block reward, maintaining or enhancing the security budget.
Market Anticipation and Speculation: Halving events are often accompanied by significant market attention and speculation, leading to increased trading activity and liquidity as investors attempt to predict and capitalize on potential price movements resulting from the supply shock.
Long-Term Viability: By enforcing a methodical reduction in new supply, Bitcoin’s halving events are designed to ensure the network’s long-term viability, preventing the rapid depletion of mining rewards and encouraging sustainable growth.
Brief History Of Past BTC Halving Dates And Their Impact
The history of Bitcoin halving dates back to November 28, 2012, when the first halving occurred at block 210,000. Prior to this event, the block reward was 50 BTC. Post-halving, it was reduced to 25 BTC. The impact was significant, with the price of Bitcoin increasing from approximately $12 in November 2012 to over $1,100 in November 2013, marking an increase of over 9,000%. This price surge is attributed to the reduced supply of new bitcoins and increased media and investor attention.
The Second and Third BTC Halving
The second BTC halving took place on July 9, 2016, at block 420,000, further reducing the block reward to 12.5 BTC. The price at the time of the halving was around $650, and over the next 18 months, Bitcoin experienced unprecedented growth, reaching an all-time high of nearly $20,000 in December 2017. This represented an approximate 3,000% increase from the halving date to the peak of the market cycle.
The most recent, third Bitcoin halving occurred on May 11, 2020, at block 630,000, cutting the block reward down to the current 6.25 BTC. The price of Bitcoin on the halving date hovered around $8,600. Following this halving, Bitcoin entered another bull market, reaching a peak of around $64,000 in April 2021, which corresponds to an increase of roughly 644% from the halving date to the peak.
Each BTC halving has been followed by a period of increased Bitcoin prices, though the extent and duration of these bull markets have varied. The halvings are believed to have a direct impact on the price due to the reduced rate of new Bitcoin creation, which, if demand remains constant or increases, can lead to a higher price per Bitcoin.
The Fourth Bitcoin Halving
It’s important to note that while the Bitcoin halvings are significant, they are not the sole drivers of Bitcoin’s price. Other factors such as regulatory changes, technological advancements, macroeconomic trends, and shifts in investor sentiment also play crucial roles in the cryptocurrency’s valuation.
The next BTC halving is estimated to occur on April 24, 2024, at block 840,000, where the block reward will be reduced to 3.125 BTC. As with previous halvings, there is considerable speculation about the potential impact on the price and mining dynamics of Bitcoin. Historical patterns suggest a potential increase in Bitcoin’s price, but the actual outcome will depend on a complex interplay of market forces at the time.
The next BTC halving is at block 840,000
List Of The Next BTC Halving Dates
Bitcoin halvings occur every 210,000 blocks, which, with an average block time of roughly 10 minutes, translates to approximately every four years. Given that the last halving occurred in May 2020, we can project the next BTC halvings by adding four years to the previous halving date, keeping in mind that variations in actual block times can cause slight deviations from these estimates.
Here is a projected list of the next BTC halving dates until the emission of new bitcoins reaches zero:
The Next BTC Halving: Expected at block 840,000, around April 2024, reducing the block reward to 3.125 BTC.
2028 Halving: Expected at block 1,050,000, reducing the block reward to 1.5625 BTC.
2032 Halving: Expected at block 1,260,000, reducing the block reward to 0.78125 BTC.
2036 Halving: Expected at block 1,470,000, reducing the block reward to 0.390625 BTC.
2040 Halving: Expected at block 1,680,000, reducing the block reward to 0.1953125 BTC.
2044 Halving: Expected at block 1,890,000, reducing the block reward to 0.09765625 BTC.
2048 Halving: Expected at block 2,100,000, reducing the block reward to 0.048828125 BTC.
2052 and Beyond: The next BTC halvings will continue every four years, with the block reward continuing to halve until it becomes negligible.
The process will continue until the maximum supply of 21 million bitcoins has been reached, which is estimated to occur by the year 2140. After the final Bitcoin has been mined, miners will no longer receive block subsidies and will rely solely on transaction fees as compensation for their contribution to the network’s security.
Projecting the Next BTC Halving Date
When Is The Next BTC Halving Date
The next BTC halving is projected to occur when the Bitcoin blockchain reaches block 840,000. Based on the average time it takes to mine a block, the halving events have historically taken place approximately every four years. Given the current block height and the average block time, the next BTC halving is estimated to happen in April 2024.
Current Data And Prediction Of The Next BTC Halving Date
As of the latest data, the next BTC halving is anticipated to occur in April 2024. However, the exact date cannot be predicted with absolute certainty due to the variable nature of block times; it could potentially occur in late March or extend into May 2024. The most precise estimates suggest that the event will likely take place on April 20, 2024, at 10:24:52 AM UTC, according to CoinWarz.
These predictions are based on the current hashrate, or the total computational power, being used to mine and process transactions on the Bitcoin network. Fluctuations in hashrate can affect block times and thus could slightly alter the expected date of the halving. It’s important to note that while these predictions are made with the best available data, they should be considered as estimates rather than exact timings.
Next BTC Halving Countdown
How To Track The BTC Halving Countdown
To track the BTC halving countdown, enthusiasts and investors can use specialized tools that monitor the current block height and calculate the estimated time until the next BTC halving event based on the average block time. List Of Reliable Countdown Tools
Here are the estimated dates and times for the next BTC halving according to various countdown tools, providing a range of perspectives on when the event is expected to occur:
NiceHash BTC Next Halving Countdown: Estimates the next BTC halving to occur on March 27, 2024, at 19:28 UTC. This tool factors in the current hashrate and block time to provide its countdown.
Bitcoinsensus BTC Halving Countdown: Projects the halving to take place on April 24, 2024, at 04:24:04. Bitcoinsensus provides a detailed countdown timer that updates in real-time.
CoinWarz BTC Halving Countdown: Predicts the halving event will happen on April 20, 2024, at 10:24:21 AM UTC. CoinWarz uses a comprehensive approach to estimate the date and time, considering the latest network data.
Blockchair BTC Halving Countdown: Offers an estimated date and time for the reward drop on April 24, 2024, at 3:22 AM UTC. Blockchair’s countdown is based on sophisticated tracking of blockchain metrics.
Historical Market Trends Pre- And Post-Halving
Historically, Bitcoin has exhibited significant price movements both in anticipation of and following halving events. The halving tends to create a bullish sentiment as the supply of new bitcoins entering the market slows down.
Crypto analyst Rekt Capital has delineated the Bitcoin market cycle into five distinct phases surrounding the next BTC halving event, based on historical patterns:
Pre-Halving Period: With approximately 5.5 months until the April 2024 halving, history suggests that any significant price retracements in this phase can offer substantial ROI for investors in the months following the halving.
Pre-Halving Rally: Roughly 60 days before the halving, a rally typically ensues as investors buy into the hype, anticipating a sell-off post-event.
Pre-Halving Retrace: Around the time of the halving, the market often experiences a retrace. This was -38% in 2016 and -20% in 2020, leading to doubts about the halving’s bullish impact.
Re-Accumulation: Post-halving, a period of re-accumulation occurs, often marked by investor exit due to the slow pace of price movement and lack of immediate gains.
Parabolic Uptrend: Once Bitcoin exits the re-accumulation phase, it typically enters a parabolic uptrend, leading to accelerated growth and new all-time highs.
5 Phases Of The Next Bitcoin Halving | Source: X @rektcapital
FAQs About The Next BTC Halving
What Is The Bitcoin Network?
The Bitcoin network is a decentralized digital ledger that records all Bitcoin transactions across a network of computers. It is powered by blockchain technology, which ensures security and transparency by allowing multiple copies of the data to be stored on nodes across the network.
When Is The Next BTC Halving Date?
The next BTC halving is estimated to occur on April 24, 2024, but the exact date may vary based on the network’s hashrate and block time.
Are There Websites For The Next BTC Halving Date?
Yes, there are several websites that provide countdowns to the next BTC halving, including NiceHash, Bitcoinsensus, CoinWarz, and Blockchair.
What Is The Bitcoin Halving?
The Bitcoin halving is an event that halves the rate at which new bitcoins are generated by miners. It occurs every 210,000 blocks, roughly every four years, as a part of Bitcoin’s deflationary monetary policy.
What Is The BTC Halving Countdown?
The BTC halving countdown is a timer that counts down to the next BTC halving event, indicating how much time is left until the block reward for miners is halved.
Why Are BTC Halvings Occurring Every 4 Years?
BTC halvings are scheduled to occur every 210,000 blocks, which roughly translates to every four years. This is designed to create a predictable and decreasing supply of new bitcoins, mimicking the extraction curve of a finite resource like gold.
What Will Happen After The Last BTC Halving?
After the last Bitcoin halving, no new bitcoins will be created, and miners will be compensated solely with transaction fees for their role in processing transactions and securing the Bitcoin network. This is expected to occur around the year 2140.
JPMorgan analysts have cast a skeptical eye over the recent crypto rally, indicating it may be built on sand rather than solid ground. Their latest report conveys a guarded stance, suggesting that the market’s exuberance may be outpacing the underlying fundamentals.
As the market’s enthusiasm swells, fueled by pivotal developments such as the US Securities and Exchange Commission’s (SEC) potential green light of the spot Bitcoin exchange-traded fund (ETF), these financial experts are urging caution, advocating a closer examination of the elements at play.
A Closer Look At ETF Approval And Regulatory Battles
Within the crypto sphere, JPMorgan analysts disclosed that two significant events have captured investor interest and driven prices upward.
These events include anticipating a US-approved spot Bitcoin ETF, which has ignited hopes of new capital inflows. At the same time, recent legal tussles involving the SEC have raised expectations for a more permissive regulatory environment.
However, the JPMorgan team, led by analyst Nikolaos Panigirtzoglou, presents a contrarian view, deconstructing these drivers and their probable impact on the market. They argue that an ETF approval would usher in fresh capital, which might be misleading.
The analysts propose that rather than attracting new investment; the approval could redirect existing funds from current Bitcoin investment products into the new ETFs. The JPMorgan team noted:
First, instead of fresh capital entering the crypto industry to be invested in the newly-approved ETFs, we see as a more likely scenario existing capital shifting from existing bitcoin products such as the Grayscale bitcoin trust, bitcoin futures ETFs and publicly listed bitcoin mining companies, into the newly-approved spot bitcoin ETFs.
This shift, they assert, would not necessarily expand the market’s capital base. JPMorgan’s team points to the tepid response to similar products in Canada and Europe as evidence, suggesting that a US spot Bitcoin ETF might encounter the same lukewarm reception.
Legal victories against the SEC in high-profile cases like Ripple and Grayscale are also interpreted as potential precursors to a regulatory softening. Yet, the analysts remain unconvinced, citing the lingering aftereffects of the FTX scandal and the inherent risks of an under-regulated market.
They further disclosed that these factors will likely keep the regulatory tightening trend intact, with little room for significant easing.
Bitcoin Halving: A Pre-Priced Crypto Event?
The report delves into the much-discussed Bitcoin halving, which traditionally stokes bullish forecasts. However, JPMorgan’s analysts believe the market has already factored in the halving’s supply-squeeze implications. They noted:
This argument seems unconvincing as the Bitcoin halving event and its effect are predictable and in our opinion are well factored into Bitcoin price.
They calculate that based on current data, the production cost of Bitcoin post-halving should double, particularly from the current $ $21,000 to $43,000.
Their analysis concludes with a sobering outlook, anticipating a potential “buy the rumor, sell the fact” scenario post-ETF approval. Such a dynamic could see prices climb on anticipation and plummet once the event materializes, a pattern familiar to seasoned market observers.
Echoing similar sentiments, financial commentator Peter Schiff has cast doubt on the longevity of Bitcoin’s price surges driven by ETF speculations.
Schiff warns that post-approval, Bitcoin might face a shortage of positive triggers, potentially culminating in a market sell-off as the ‘buy the rumor, sell the news’ phenomenon unfolds.
How many times can #Bitcoin rally on the same ETF rumor? Once a U.S. Bitcoin EFT is approved, or $GBTC is able to convert into an ETF, there will be no more “good” news for Bitcoin to rally on. After years of buying the rumor, everyone will finally be able to sell the news.
Meanwhile, Bitcoin has seen quite a significant move in the past few hours. The asset has now marked a new high for 2023, surging above $37,000, up by nearly 10% in the past day.
BTC’s price is moving sideways on the 4-hour chart. Source: BTC/USDT on TradingView.com
Featured image from Unsplash, Chart from TardingView
Leading Bitcoin miners sold 5,492 BTC during October’s market rally, exceeding their monthly production.
A notable surge in the sale of newly mined tokens was observed from public Bitcoin miners last month. According to reports, 13 leading mining entities disposed of an amount exceeding the BTC tokens they minted in October, even as the token experienced a 26% monthly surge.
Insights from TheMinerMag show that the sell-production ratio for players like Marathon Digital Holdings and Core Scientific Inc. crossed the 100% threshold. This indicates that they sold not only the entirety of their October Bitcoin yield but also tokens from existing reserves. Hut 8 and Bit Digital opted to sell a greater number, liquidating more than 300% of their produced BTC tokens in October.
Liquidation data from 17 public Bitcoin mining companies
This uptick to a 105% sell-production ratio starkly contrasts the 64%, 77% and 77% ratios recorded in July, August and September, respectively.
Bitcoin miners are preparing for the halving
The motivation behind this sell-off, apart from capitalizing on Bitcoin’s price recovery, is attributed to strategic financial planning in anticipation of the “halving” slated for early next year. As Bitcoin’s halving will slash the mining rewards by half, miners are increasing their capital reserves by liquidating part of their BTC holdings.
The increased sale of BTC will proactively fortify the miner’s financial positions to withstand the impending reduction in incentives. This strategic move is pivotal for sustaining their operations and ensuring long-term viability in the volatile cryptocurrency market.
In a recent CNBC report, Coinbase, the largest cryptocurrency exchange in the United States, expressed confidence in the approval of a US-based Bitcoin (BTC) exchange-traded fund (ETF) by the Securities and Exchange Commission (SEC).
Paul Grewal, Coinbase’s Chief Legal Officer, highlighted that the SEC’s recent court setback in the case of Grayscale’s proposed Bitcoin ETF has paved the way for a potential approval in the coming months.
Coinbase Eyes Bitcoin ETF Approval
Grewal emphasized that Coinbase is hopeful about the approval of ETF applications due to their compliance with existing laws governing financial services. Grewal noted that prominent financial institutions have submitted robust proposals, indicating progress in the regulatory landscape.
The recent court ruling against the SEC stated that the regulator lacked a valid basis to deny Grayscale’s request to convert its GBTC Bitcoin fund into an ETF.
The SEC chose not to appeal the ruling within the specified deadline, further increasing the likelihood of a BTC-related ETF gaining approval shortly.
However, Grewal acknowledged that the ultimate decision rests with the SEC, and he refrained from providing a specific timeline for the approval process.
Nevertheless, Grewal expressed confidence in the SEC’s obligation to fulfill its responsibilities, particularly in light of the court’s decision and the requirement to apply the law impartially.
This could be particularly attractive to retail investors seeking Bitcoin exposure without the complexities of owning the underlying asset.
Per the report, Coinbase, being the largest crypto exchange in the United States, stands to benefit from the potential approval of a BTC ETF. The company’s common stock is held in portfolios designed to provide investors with crypto exposure.
Legal Troubles Mount For Grayscale’s Parent Company
While the recent court ruling has bolstered prospects for a BTC ETF, it is important to note that Grayscale’s bid to convert GBTC into an ETF is not without its challenges.
Digital Currency Group (DCG), Grayscale’s parent company, along with crypto exchange Gemini and DCG subsidiary Genesis, face a lawsuit from the New York Attorney General, accusing them of defrauding investors of over $1 billion.
Despite the ongoing legal issues, Grewal remained positive about the approval of additional Bitcoin ETFs in the future as the SEC adheres to the law and evaluates pending applications neutrally.
The report also touched upon the recent performance of BTC, which has experienced a resurgence in 2023. With a 72% year-to-date increase, Bitcoin has rebounded from significant declines in 2022.
Factors such as anticipation surrounding the upcoming BTC halving event and investor reactions to the Federal Reserve’s potential interest rate policy changes have contributed to increased demand for the digital currency.
Ultimately while trading volumes have declined recently, attributed partly to retail investors’ reduced engagement in response to low volatility and industry players’ challenges, Grewal expressed optimism that various developments, including criminal trials and rigorous regulatory actions, will restore investor and consumer interest in the crypto market.
As the landscape for Bitcoin ETFs evolves, market participants will closely monitor the SEC’s stance and any potential regulatory developments that shape the future of cryptocurrency investment products.
Featured image from Shutterstock, chart from TradingView.com
According to a report by the global investment bank Morgan Stanley, signs indicate that the cyclical “crypto winter” bear market, which has plagued the cryptocurrency industry, may finally end.
The report explores the historical pattern of Bitcoin’s (BTC) performance following halving events that occur approximately every four years. Furthermore, the report estimates that the next halving event could occur around April 2024.
The Cyclical Nature Of Crypto Markets
Per the report, Bitcoin, the dominant cryptocurrency, is a barometer for the overall crypto market. One distinctive feature of Bitcoin is its halving process, which creates scarcity and helps maintain its value.
Every four years, the number of BTC generated every 10 minutes is halved. This deliberate reduction in supply has historically affected Bitcoin’s price, often triggering a bullish market rally.
Previous cycles have witnessed three notable bull runs that lasted 12 to 18 months after each halving event.
The four-year cryptocurrency cycle aligns with the seasons, providing a framework to understand market behavior:
According to Morgan Stanley, summer represents the phase immediately following a halving event, during which Bitcoin’s price gains are typically observed until it reaches a new peak.
Fall signifies when Bitcoin surpasses its previous high, attracting media attention, new investors, and businesses. This phase indicates that the bull market is nearing its end.
Winter characterizes the bear-market decline, initiated by profit-taking and selling pressure from investors, resulting in price drops. This phase persists until the next market trough, typically around 13 months.
Spring is the phase leading up to the next halving event, during which Bitcoin’s price generally recovers from the cycle’s low point. However, investor interest tends to remain relatively weak during this period.
Gauging Indicators To Ascertain The Transition From Winter To Spring
Determining whether crypto spring has truly arrived requires considering several factors. These include the time elapsed since the last peak, the magnitude of Bitcoin’s drawdown from its high, miner capitulation, the Bitcoin price-to-thermocap multiple, exchange-related issues, and price action.
These indicators can provide insights into whether the market has reached a trough or is still experiencing crypto winter.
While the report suggests that crypto winter may be in the past and crypto spring is on the horizon, it emphasizes the importance of learning more about the crypto market’s cyclical tendencies.
The daily chart shows BTC’s sideways price action over the past 24 hours. Source: BTCUSDT on TradingView.com
BTC is trading at $28,500, showing a modest recovery in the past 24 hours after an unsuccessful attempt to stabilize above $30,000 on Monday, followed by a subsequent decline to the $28,000.
Notwithstanding this recent volatility, Bitcoin has maintained substantial gains across various time frames. It has experienced a notable surge of 7.4% over the past seven days, 4% over the past fourteen days, 5% over the past thirty days, and an impressive 49% surge over one year.
Featured image from Shutterstock, chart from TradingView.com
