Bitcoin: Will the upcoming halving change BTC’s fortunes?

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  • Grayscale’s data sug­gest­ed a pos­i­tive out­look towards Bit­coin as the halv­ing approaches.
  • Bit­coin ETFs and on-chain activ­i­ty could off­set poten­tial post-halv­ing volatility.

Bit­coin [BTC] has seen a mas­sive ral­ly over the last few days, inspir­ing opti­mism from hold­ers and traders alike. How­ev­er, there were some con­cerns about the upcom­ing halv­ing and the impact it could have on BTC.

No need to worry?

How­ev­er, Grayscale Invest­ments recent­ly released data sug­gest­ing that things could turn out well for BTC.

Accord­ing to their released data, Bitcoin’s halv­ing is set to take place around April 2024.

While acknowl­edg­ing short-term chal­lenges for min­ers in terms of rev­enue, Grayscale empha­sized the pos­i­tive fun­da­men­tal changes sur­round­ing this halving.

Accord­ing to their data, min­ers have strate­gi­cal­ly posi­tioned them­selves to counter reduced block rewards by secur­ing funds through equity/debt issuances and sell­ing reserves, mit­i­gat­ing poten­tial finan­cial strains.

Despite these fac­tors, traders should account for the pos­si­bil­i­ty that many min­ers may sell their hold­ings to main­tain prof­itabil­i­ty, which could cause down­ward pres­sure on BTC.

The declin­ing rev­enues faced by the min­ers could impact the sit­u­a­tion neg­a­tive­ly as well.

Source: Blockchain.com

Looking at the ecosystem

Anoth­er fac­tor that could off­set volatil­i­ty after the halv­ing could be the ris­ing inter­est in Bitcoin’s ecosystem.

Recent­ly, there was a surge in on-chain activ­i­ty on the Bit­coin net­work, par­tic­u­lar­ly with the advent of ordi­nal inscriptions.

The inscrip­tions have led to over 59 mil­lion Non-Fun­gi­ble-Token [NFT] col­lectibles, and have inject­ed vital­i­ty into BTC’s ecosystem.

This has result­ed in sig­nif­i­cant trans­ac­tion fees, exceed­ing $200 mil­lion as of Feb­ru­ary 2024.

The sus­tained on-chain activ­i­ty growth trend is expect­ed to con­tin­ue, fueled by ongo­ing inno­va­tions and renewed devel­op­er inter­est in the Bit­coin blockchain.

The surge in activ­i­ty and the sub­se­quent fees gen­er­at­ed on the Bit­coin net­work could also help off­set the sell­ing pres­sure that the Bit­coin min­ers might face in the future.

Source: Glassnode

The con­tin­ued adop­tion of Bit­coin ETFs could help absorb sell pres­sure and reshape Bitcoin’s mar­ket struc­ture by intro­duc­ing a steady demand, ulti­mate­ly favor­ing price dynamics.

At press time, BTC was trad­ing at $48,204.27. Its price had surged by 0.17% in the last 24 hours.


Read Bitcoin’s [BTC] Price Pre­dic­tion 2024–25


The veloc­i­ty at which BTC was trad­ing dur­ing this peri­od had also declined, indi­cat­ing that the fre­quen­cy at which BTC was being trad­ed had fallen.

Only time will tell how the address­es will behave post-halving.

Source: San­ti­ment

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