Seven years back on a Monday, a reduction of the Bitcoin mining rewards from 25 to 12.5 BTC occurred, setting off a surge in the price which analysts are expecting to be repeated when the following Bitcoin halving takes place in 2024.
The effects of the past halvings which resulted in a positive price trend will be felt by all participants in the Bitcoin network, from traders and holders to miners. This pattern has been evident in multiple halvings, with the 2016 event being the second one since 2012, and the third one occurring in 2020.
Come April 2024, the mining rewards for a single block of Bitcoin will be reduced to 3.125 BTC as the fourth halving event takes place.
On July 9, 2016, Berenberg Capital Markets analysts noted that Bitcoin was trading around $650. After 524 days, it had risen to its highest point at the time, a mark of $19,712.
Analysts Mark Palmer, Matthew LaFlash and Hassan Saleem from Berenberg determined that rallies happened after the initial and third bitcoin halvings.
On Nov. 28, 2012, the value of Bitcoin rose from $12 to an impressive $1,164 in a mere 367 days.
When bitcoin was worth $8,821 on May 11, 2020, its mining rewards were decreased from 12.5 BTC to 6.25 BTC. 549 days later, the cryptocurrency achieved its highest point ever, amounting to a price of $69,036.
According to Berenberg analysts, if a rally follows the fourth halving and is similar to those that happened after the preceding halvings, then it could last until October 2025.
Industry participants noted that the degree of acceptance of bitcoin has changed significantly since its debut seven years ago.
YCharts.com has compiled data that reveals Bitcoin’s hash rate to be around 425 million terahash/second (TH/s). This is a substantial increase from the figure of 1.5 million terahash/second (TH/s) that was recorded in July 2016.
In 2016, it was possible to solo mine cryptocurrencies with just a laptop, however Matt Lason, the chief investment officer at Globe 3 Capital’s crypto hedge fund, stated that nowadays, high-end mining machines and joining large mining pools are necessary to even compete.
Lason predicted that the cost of bitcoin will experience an increase after the halving as it usually does, expressing that the halving event is usually accompanied by a rise in the cryptocurrency and stock market.
Lason pointed out to Blockworks the significance of bitcoin’s monetary policy and the worth of rarity in a world of inflation. He noted that, though prior price rises can’t promise a future increase, the bitcoin halvings are a reminder of the value of this scarcity.
The value of Bitcoin dropped below $17,000 following the failure of FTX, a crypto exchange. However, by Monday afternoon, it was back up to around $30,300 — a remarkable 82% increase in the year so far.
The Berenberg Capital Markets analysts noticed the favorable price movement of bitcoin after BlackRock, a prominent player in the Traditional Financial (TradFi) industry with oversight of $9 trillion in assets, submitted an application to the SEC for a spot bitcoin ETF last month.
During a Fox Business interview, BlackRock CEO Larry Fink proclaimed last week that crypto is essentially “digitizing gold” and referred to bitcoin as a “global asset.”
Lason pointed out that the 2024 halving of Bitcoin presents a specific issue for miners, although the cryptocurrency’s value is likely to surge. He went on to say that as the profits of these organisations will be plummeting, their equipment and power costs have skyrocketed.
Recently, some miners have chosen to sell a part of the bitcoin they mine in order to take care of their operational expenditures.
According to a research note by Geoffrey Kendrick, the head of Standard Chartered’s FX and digital assets research, he postulates that the sales from miners will diminish due to the appreciation of bitcoin and increased cash gains.
He noted that this could cause bitcoin’s value to skyrocket to $50,000 by the end of 2021 and reach $100,000 by 2024.
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