Bitcoin has completed its fourth halving. This historic moment, which occurred on April 19, 2024, saw the block reward for Bitcoin miners reduced by half, from 6.25 BTC to 3.125 BTC.
Ryan Lee, Chief Analyst at Bitget Research, commented on the event, “Less than 48 hours since the BTC halving, we’re witnessing a pivotal moment in the cryptocurrency market. This event, which is designed to regulate the supply of Bitcoin, has historically spurred intense market speculation and volatility. Historically, each halving has paved the way for a bull market in the subsequent 6-12 months.”
Surge in Transaction Fees and Market Corrections
The halving coincided with a surge in transaction fees as many users competed for limited space. Bitcoin users collectively spent 37.7 BTC in fees, equivalent to over $2.4 million at current prices, to secure transactions within this block. The halving block saw a record-high 37.6 BTC fee (worth more than $2.4 million) attached to it.
Lee added, “Recent market corrections have brought challenges, causing some investors to incur losses. Despite this Bitcoin price momentum, there are significant opportunities ahead. The investment logic remains sound, with a short-term focus on BTC ETF fund flows, a medium-term outlook on stablecoin market value, and a long-term consideration of the Federal Reserve’s Monetary Policy.”
Impact on Bitcoin Miners and Market
The immediate impact of the halving is felt primarily by Bitcoin miners, who see their block rewards cut in half. This affects their profitability and could lead to changes in the cryptocurrency mining industry.
As the rate at which new bitcoins enter circulation is reduced by 50 per cent, the asset becomes increasingly rare. This built-in deflationary mechanism creates potential long-term upward pressure on Bitcoin’s price.
Bitcoin Price Remains Stable
Despite the significant event, the price of Bitcoin remained relatively stable at around $64,000. Bitcoin traded above $65,000-mark as against the $63,000 level on Friday.
Shivam Thakral, CEO of BuyUcoin, India’s second-longest-running digital asset exchange, shared his thoughts, “We believe that the Halving event’s consequences will go beyond Bitcoin’s price, since it represents an important turning point in the ecosystem. Indian investors, much like their global counterparts, are keeping a close eye on. With Bitcoin’s remarkable gains of 54% this year alongside its current market capitalization standing at $1.28 trillion, Bitcoin is cementing its importance as an investment vehicle.”
Will the Trend Continue?
Historically, Bitcoin has rallied post halving. However, the relationship between halving events and price appreciation is not always straightforward and can be influenced by various market factors.
Parth Chaturvedi, Investments Lead, CoinSwitch Ventures, commented on the market trends, “With overall crypto M.Cap. just below $2.5 trillion, the market has undergone minor correction in the last 24 hours. BTC’s (-0.8%) MVRV (Market Value Realized Value) ratio seems to have fallen below its 90-day average, hinting towards an upcoming buying opportunity for crypto investors. In fact, BTC whales accumulated around $1.2 billion worth of BTC on Friday. The halving event, alongside the launch of Runes token standard, had also led to the surge in transaction costs.”
As the world watches the aftermath of the Bitcoin Halving 2024, only time will tell if the trend will continue and what impact it will have on the broader crypto market.
