The fourth Bitcoin halving is just around the corner.
The event takes place every four years. This year’s event will reduce block rewards to 3,215 bitcoin from 6.25 bitcoin, a drop of around 50%.
The halving is likely to take place on April 19, which means there are approximately 8,600 bitcoin blocks until the event.
The previous halvings have reached bitcoin highs, with bitcoin reaching $1,000 after the 2012 halving and $20,000 after the 2016 halving.
The most recent halving, which took place in 2020, preceded bitcoin reaching its peak of $69,000.
But the jump in price didn’t happen overnight. In some cases, it took months for bitcoin to climb to new highs, though that doesn’t mean the events themselves haven’t historically been a catalyst for bull market momentum.
However, keep in mind that this is only the fourth event of its kind.
Read more: The next bitcoin halving is coming. Here’s what you need to know
The final bitcoin halving is estimated to occur in 2140, although the events are scheduled to occur every 210,000 blocks.
According to recently published emails from Satoshi – the creator of bitcoin – the “choice for the number of coins and distribution schedule was an educated guess,” in their own words.
“Time will tell, but historical data strongly suggests a significant increase over 18 months,” said Sabre56 CEO Phil Harvey.
In early February, a Finder price forecast report on bitcoin’s price action believed that bitcoin (BTC) could peak at $77,000 by the end of 2024.
So far this year, bitcoin has climbed over $50,000. The possibility of bitcoin climbing to new highs is due to several factors, according to the report.
“First, large companies and institutional investors [are] showing growing interest [in bitcoin, which] will likely drive demand. Second, the approval of spot ETFs tame[es] [price exposure to bitcoin] more accessible than [it was in] past market cycles,” said Komodo Chief Technology Officer Kadan Stadelmann.
The halving, Stadelmann added, creates “a scarcity that tends to increase its value.”
It is important to note that this will also be the first halving with institutional interest following the approval of spot bitcoin ETFs in January.
To put the impact of bitcoin ETFs into perspective, K33 Research noted that “Bitcoin ETPs globally saw a net 30-day inflow of 83,500 BTC over the past 30 days, equivalent to 3 months of BTC miner rewards at current rates.”
Harvey said he believes the ETFs in the US could “add further stability to the industry as a whole.”
Read more: Bitcoin price tracking ahead of past 2 halvings – now 3 months to go
“The halving will still be new to many and a post-halving market is ripe for many deals to be done. The US ETF should add robustness and maturity to the industry with less future volatility,” he continued.
Ryze Labs, in a recent market note, said that with the “unprecedented traditional financial inflows via Bitcoin ETFs” accompanying the halving, “our long-term bullish outlook remains solid.”
“This backdrop presents a unique confluence of factors that could propel Bitcoin to new heights or — who knows — test its volatility in unforeseen ways,” said Mikkel March, founder of ARK36.
March warned that the price expectations “should not be based solely on historical patterns of price increases before or after halving, but also on the evolving landscape of cryptocurrency’s integration into traditional finance.”
Read more: What happens during the bitcoin halving?
Harvey believes the halving could lead to the centralization of mining.
“We are witnessing the industrialization of mining, but it is worth noting that there are still many miners worldwide. As long as this continues, mining – and BTC – will remain decentralized, albeit among fewer players,” he said.
As Blockworks previously reported, some bitcoin miners may see some financial stress due to the decrease in rewards.
“Historically during previous halvings we did see an initial decline in hash, but miners can sustain themselves if they find lower power prices and/or have better equipment – with the latter option obviously costing more capital,” analysts at BitOoda wrote in a note.
Valkyrie co-founder Steven McClurg previously told Blockworks that the bitcoin ETFs have led to interest in other bitcoin products offered by the asset management firm, including its bitcoin miners ETF, which trades under the ticker WGMI.
The ETF holds miners such as Marathon, CleanSpark, Cipher and Riot as well as stocks such as Nvidia.
He explained that Valkyrie’s bitcoin miners ETF is “actively managed because there are going to be miners who don’t survive and there are going to be some who thrive in this environment. And hopefully we choose the right ones.”
Updated February 23, 2024 at 1:54 PM ET: Clarified that the halving is likely to occur on April 19.
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