The upcoming Bitcoin halving event is set to slash block rewards in half, impacting the supply and availability of the premier cryptocurrency. This has sparked a division among investors and market observers regarding how it might affect Bitcoin’s future trajectory. Kadan Stadelmann, a leader at Komodo since 2016, shared insights on Bitcoin’s future, with historical data suggesting that halvings typically kick off new bull market cycles, generating optimism within the crypto community. The halving may impact the number of miners, as the costs per token will double.
However, if the price per Bitcoin continues to rise, it could partially offset potential losses from reduced mining rewards. Furthermore, there is an anticipation of large-scale corporate enterprises entering the Bitcoin mining space. On the demand side, the capital inflow into Bitcoin ETFs has been considerable. Within just seven weeks, Bitcoin ETFs received the same level of inflow that took gold ETFs three years to achieve.
MicroStrategy has also announced plans to increase its Bitcoin holdings significantly. On the supply side, the upcoming Bitcoin halving in April will reduce the new supply issued by half, creating a sense of FOMO (fear of missing out) among investors. It is also possible that a significant portion of retail demand is being met by spot Bitcoin ETFs. Investors are driven by Bitcoin’s status as a counter-narrative to fiat currency, given its deflationary nature compared to the inflationary trend of fiat currency.
Looking ahead, Bitcoin’s historical post-halving trend has led to an increase in market value, drawing media attention and subsequently influencing numerous other cryptocurrencies. This is expected to continue into the second half of 2024 and early 2025. Considering the long-term value of cryptocurrencies, it is crucial to assess factors such as tokenomics, technology, and use cases. In the short term, BTC price is likely to increase if the historical post-halving trend repeats itself in this cycle, with the potential for a strong bull cycle through 2025.
While the current market may appear bearish, historical trends around previous halvings indicate that the market tends to wake up quickly during the post-halving period. With new institutional adoption and the proliferation of spot Bitcoin ETFs, there are predictions of Bitcoin reaching $100k by the end of the year, potentially leading to a market-wide rally for most altcoins later in 2024 or early 2025.