Bitcoin marked its fourth quadrennial “halving” on April 19th, and its price remained relatively unchanged in the days surrounding the event.
Pseudonymous Bitcoin creator Satoshi Nakamoto still has influence over Bitcoin’s price 14 years after his major debut, and many people who pay attention to Bitcoin are… buy bitcoin online It will serve as evidence. The protocol supporting Bitcoin, designed by an anonymous developer group or individual who has remained silent until now, has witnessed the start of the fourth halving. So far, this event has been synchronized with an increase in prices, a trend that has become more pronounced as the days go by. This primarily boils down to a reduction in the rewards miners receive after adding a block to the chain, which is now from 6.25 BTC to 3.125 BTC per mined block.
So what exactly is a halving, and how does it typically affect Bitcoin?
Let me remind you once again what the often-mentioned half-life is.
Before delving into the myriad possible scenarios and impacts that a halving of BTC given to miners would have on market prices, the most prudent thing to do is to clear up the complexities surrounding the process in question. This event primarily comes down to the number of Bitcoins developed and registered.
Transactions carried out in cryptocurrencies are registered on a publicly accessible distributed ledger called a blockchain. These “transactions” are uploaded onto the chain by “miners” whose job is to squander them into “blocks” that are eventually “chained” together. The entire process unfolds with the help of special hardware and software that solves the encryption problem. Successful miners are rewarded with Bitcoin.
The protocol’s developers wanted to ensure that the number of Bitcoins in circulation on the market never exceeded 21 million, so the conventions controlled which coins were released at any given time. This limit operation is rolled out under the name of “halving” and occurs approximately every four years or so every 210,000 blocks are chained.
It is predicted that Bitcoin will continue to halve until the amount in circulation reaches 21 million, around 2140. However, that number will never be this accurate, as enough coins are often lost without a trace to reach this particular number.
Is it possible that events are “priced in”?
Many questions revolve around whether the built-in potential is halved and fulfills the common aspirations of all investors around the world. However, this curiosity, which has been flying around a lot lately, involves many factors in the evaluation process. For example, Bitcoin reached a new ATH a few days before the halving completed. It broke through the $73,830 barrier on March 12th. This is an example of a situation where analysts prove they have priced in.
At the same time, the support of investment giant JP Morgan is also worth noting. The likelihood of Bitcoin price appreciation after the halving may be lower than even the most optimistic investors expect, according to a JPMorgan representative. There are reasons why asset prices don’t meet everyone’s expectations.
Once upon a time, Bitcoin may still be in an “overbought state” despite the latest price correction. This status typically represents recent changes in asset prices and reflects expectations that a correction is on the horizon. Moreover, when compared to gold, its value is still above the bank’s volatility-adjusted value of $45,000. It will soon exceed the estimated $42,000 in production costs it will incur after the halving.
It is important to note that many disagreements will emerge. For example, former Barclays bank managing director John Glover cautions that pay cuts can understandably take some time to impact the market. While the average crypto debater is entirely focused on the historic Bitcoin price rise, no one is worldly and realistic enough to talk about the long period it typically takes for explosive price increases to appear. There aren’t many.
So how long should I wait?
Obviously, if you have Bitcoin as part of your portfolio, you are mostly trying to estimate when the advertised skyrocketing price will catch your eye. At every halving, prices usually reach a peak before the already frenetic large correction occurs. Soon, actual milestones took 10 to 15 months of development.
On the other hand, there is no completely accurate prediction of how long you should hold your cryptocurrency investment. The cryptocurrency market remains highly volatile and surprising, so the best thing you can do is hone your forecasting skills, monitor economic, political, and geographic events around the world, and stay realistic. .
The key is patience, so practice with confidence.
What about the 500 day range?
When the first halving took place in 2012, the price of Bitcoin rose 16% over the next two months. As a result, the 2016 halving saw asset prices drop 6% in the same 60-day period, despite expectations for a massive rally in 2017.
Markus Thielen, head of research at 10X, explains that prices have increased as a result of reduced supply. Nevertheless, as a rule of thumb, investors should generally practice patience until the price spikes, assuming 500 days after the halving. This bull run was an exception, as the price of Bitcoin managed to hit a high of $103,900 less than 250 days after the halving, robbing many cryptocurrencies. This strong record is largely driven by President Donald Trump’s re-election and the belief that a more crypto-friendly regulatory framework will continue.
What impact could this event have on asset prices?
Firstly, if we analyze past performance, this event will inevitably affect the price of Bitcoin and the value of all other crypto coins surrounding it. However, it is impossible to fully speculate or predict how much the major cryptocurrencies will fluctuate.
It’s worth noting that despite the significant gains following the past two halvings, a fall inevitably occurred. During this period, also known as winter, investors’ confidence in Bitcoin was tested as prices fell to modest levels. It was a moment when many people were too quick to sell their holdings and rejoice in the profits that followed.
Source: Our Culture – ourculturemag.com
