How Will the Bitcoin Halving Affect ETH Price? – TradingView News

A number of factors make the upcoming Bitcoin BTCUSD halving in April the most anticipated in the history of crypto.

Three previous Bitcoin halvings took place on November 28, 2012, July 9, 2016, and May 11, 2020. This time, the halving follows the United States Securities and Exchange Commission (SEC) approving the first ever exchange-traded Bitcoin. funds (ETFs) in the US, greatly increasing the hype surrounding the event.

The ETFs are not the only factor raising expectation levels. Julian Grigo, head of institutions and fintech for Safe – the creators of SafeWallet – told Cointelegraph that the Bitcoin halving is an important reminder of what separates Bitcoin from fiat currency.

This Bitcoin halving comes after a period of higher than average global inflation.

“After two years of higher inflation in the US and the Eurozone and even higher in other economic areas, an asset with a fixed supply is really attractive to investors,” Grigo said. “The Bitcoin halving event will serve as a reminder of that.”

“This reminds global investors and observers of one of the key features of Bitcoin: a fixed supply schedule that no one can change. In this regard, Bitcoin and other cryptocurrencies stand in stark contrast to currencies issued by nation states such as the US dollar become.”

However, according to Grigo, this limited supply is even more true of Ether ETHUSD right now

“Bitcoin’s supply is still growing – just at a slower rate. In contrast, Ether’s supply is actually decreasing. From that perspective, Ether can be seen as an even better store of value […] Therefore, I would not be surprised to see Ether benefit even more from the halving event than Bitcoin,” he said.

Market volatility and price increases

Joey Garcia, director and head of public affairs, policy and regulation at Xapo Bank, told Cointelegraph that he expects the halving to be positive for Ethereum and the broader market.

Garcia says, “The mechanism is designed to mimic the scarcity and deflationary aspect of precious metals.” He adds: “The indirect effect this could have on Ethereum and the broader market is interesting.”

He said the halving could positively impact market sentiment and “lead to more resources and innovation flowing into wider ecosystems like Ethereum.”

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The scarcity Garcia refers to is the reduction of mining rewards from 6.25 BTC to 3.125 BTC. Of course, this is expected to put increased pressure on the supply side of Bitcoin.

Alun Evans, co-founder of Laos Network, a universal layer-1 for digital assets, told Cointelegraph: “While this event directly affects Bitcoin, its implications are felt across the entire crypto ecosystem, including Ethereum.”

Evans adds, “The reduced supply of new coins entering the market could lead to scarcity. If Bitcoin’s price rises after halving, Ethereum and other cryptocurrencies are likely to experience price increases as investors diversify their portfolios.”

Evans believes this may not be the entirely positive news many think it is. He told Cointelegraph that there could be some downside to rapid price appreciation in ETH. Evans argues, “a surge in Ethereum’s price is not entirely beneficial. While Bitcoin primarily serves as a digital store of value or as a payment method, Ethereum supports various applications and smart contracts.

Therefore, a more volatile and unpredictable market can make Ethereum use less palatable for users and developers. This is a problem that Ethereum developers will have to contend with during the next bull cycle.

“As Ethereum network costs increase, we will continue to see alternative layer-1 and layer-2 scaling solutions (e.g. multi-Ethereum Virtual Machine superchains) to improve the network’s scalability and reduce transaction fees, making it more accessible and cost-effective for users and developers,” says Evans.

Is it the halving or something else?

While there are those who attribute positive market action to Bitcoin and the halving, others point to additional factors. Siddharth Lalwani, CEO of Range Protocol — an infrastructure Web3 liquidity — is among those looking elsewhere to explain positive price appreciation for Ethereum.

“Bitcoin continues its parabolic rally as investors anticipate the upcoming supply halving event in the next few weeks,” Lalwani told Cointelegraph. “Reflecting on steady inflows into Bitcoin ETFs, there are three core catalysts driving net positive market action: Ethereum’s Dencun upgrade in March, the Bitcoin halving in April, and the prospect of seeing Ethereum ETF approvals by the SEC in May .”

But while most analysts are focusing on the positive aspects of upward Bitcoin momentum, Lalwani predicts that Ethereum could lose out in the shorter term.

“As Bitcoin rises to all-time highs, liquidity is momentarily drawn from other sources such as Ethereum and altcoins. Once attention shifts away from Bitcoin to the potential of an Ethereum ETF, liquidity will return and consolidate at high levels, which leading to price appreciation for the macro outlook,” said Lalwani.

Ultimately, Lalwani expects “a bullish trend for overall crypto markets to prevail in 2024.”

Jordi Alexander, chief alchemist at Mantle – a network for Ethereum summaries – is another who argues that Ethereum price appreciation should not be attributed only to the halving.

“The sheer force of rising Bitcoin prices has seen clear effects on Ethereum, backed by a resurgence of investor interest in crypto. Major industry milestones from the Ethereum Dencun upgrade taking place in March, to Bitcoin halving in April and the possibility of a mock Ethereum ETF launch in May has caused excitement everywhere,” Alexander told Cointelegraph.

Alexander added that “these events are predictable and greatly appreciated.”

Despite this, Alexander maintains that both Bitcoin and Ethereum remain good long-term investments.

“As long as these two assets still have buyers, new money inflows will continue to come in – but at some point there will be no signs left to buy […] We will eventually reach a point where token issuance becomes very low, and the supply squeeze will kick in, leading to explosive moves.

Aki Balogh is the co-founder and CEO of DLC.Link, a Web3 infrastructure that enables Bitcoin holders to self-wrap and engage in decentralized finance. Balogh told Cointelegraph that he is very bullish on Bitcoin due to the halving, Ordinals and MicroStrategy “turning the market around,” all of which are “further reducing supply.”

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Balogh points out that “ETH and other tokens are highly correlated with BTC.”

“Many hedge traders trade ETH and other tokens against BTC instead of US dollars to minimize [foreign exchange] risk. So, if BTC goes up, it will have a secondary effect of increasing the values ​​of ETH and other tokens,” he said.

As Grigo neatly summarizes, “The Bitcoin halving is a megaphone for crypto as a new asset class, but Ethereum may have the loudest echo.”