Bitcoin Halving: Analyzing the Effects on Price and Market Sentiment15. Juli 2023
• Bitcoin’s upcoming halving event is expected to have bullish implications for the asset’s price.
• Theoretically, when a Bitcoin halving occurs, the number of BTC available on the market decreases and its price appreciates as a reaction to its record scarcity.
• However, some analysts are skeptical that the 2024 halving will have a similar impact because its “new supply limit decreases significantly.“
What Is Bitcoin Halving?
Bitcoin’s „halving“ is an event that reduces the asset’s inflation rate roughly once every four years. At Block 840,000 (which is expected to occur on April 26 2024), the number of Bitcoin (BTC) produced every ten minutes will fall from 6.25 BTC to 3.125 BTC.
Effects On Price
When an asset is scarce and/or greatly desirable, its price rises. Likewise, when an asset is plentiful but has little money chasing it, its price falls. Theoretically, when a Bitcoin halving occurs, the number of BTC available on the market decreases and its price appreciates as a reaction to its record scarcity. Following Bitcoin halvings in 2012, 2016, and 2020, it has experienced parabolic bull runs to new all-time highs in late 2013, 2017, and 2021 respectively.
Skepticism Of Halvings Impact
Some analysts are skeptical that the 2024 halving will have a similar impact by 2025 due to decreased “new supply limit“. Coinbase analysts published a report last month suggesting that bull markets following previous halvings may have been spurred by coincidental macroeconomic factors rather than the halving itself.
Institutions Bullish On 2025
Many institutions already appear bullish on 2025 and are placing money on Bitcoin reaching new highs with companies such as Riot , CleanSpark ,and Iris Energy making major investments before the event even happens..
The effects of past bitcoin halvings suggest that it could potentially be beneficial for bitcoin’s future prices but analysts remain divided over whether or not this will be case for this next one coming up in 2024 . Although there remains uncertainty over how much effect this event will have on bitcoin’s prices going forward , most institutions remain optimistic about what lies ahead for bitcoin in 2025 .