Historically, the price action following a Bitcoin halving has been relatively subdued within a week or two. Satoshi Nakamoto designed the system to reduce mining rewards by 50% every 210,000 blocks or four years. This reduction in block mining rewards also results in a halving of the new BTC entering circulation. As a result, the new supply of Bitcoin entering the market is reduced by half, eliminating $11 billion of annual supply.
This significant reduction is expected to have a notable impact on the market, particularly in a high inflation, high-interest rate economy, according to Hancock. After the 4th halving event, there is anticipation of a historic market opportunity during this Bitcoin cycle. Notably, Bitcoin ETFs have already been launched successfully in the US, with pending ETFs in Hong Kong and ETNs on the London Stock Exchange. Additionally, Bitcoin prices have been reaching all-time highs prior to the halving, a precedent that has not been seen before.
Spot Bitcoin ETFs have swiftly accumulated over $60 billion in assets in less than six months. The presence of institutional demand for Bitcoin is expected to continue, signaling a strong market outlook for the cryptocurrency.
