Here is an excerpt of a recent issue of Bitcoin Magazine Pro. Bitcoin Magazine Pro’s premium newsletter on markets. You can receive this analysis and more on the Bitcoin chain straight into your email. subscribe now.
We are getting closer to Bitcoin’s impending halving. Demand is exploding and the supply is shrinking. This has created a unique market. It turns a historically favorable omen, into incredibly profitable opportunity.
Bitcoin has been transformed by the Bitcoin ETF. The SEC’s fateful decision made in January has caused global upheaval. Since then, billions of dollars have been invested in these new opportunities. Regulators in many countries have begun to consider the role that Bitcoin will play in their respective economies. financial establishment. Market has grown despite initial challenges. hit The price is at new highs and has been remarkably stable despite fluctuation.
We are still in an extremely unique position that could impact the market unexpectedly. Bitcoin’s next In April we will see the first halving. first time The halving of the Bitcoin price will be the first time in history when it coincides with an historic high. While there were many variations between the various halvings in history, one trend was generally apparent: Even though there may have been huge, steady gains for a while, Bitcoin will not reach its peak price until at least a full year or 18 months after the halving. Bitcoin was more than twice as high a year after the halving of June 2016. A few months later the increase had risen to nearly 30x.
Standard Chartered, for example, has shown a lot of confidence in the industry. prediction Bitcoin will double in value to more than $150k by the end of this year. Their analysis is not based on halving patterns, but rather on the roaring success of Bitcoin ETF. This success also has thrown us another curveball. The community has a number of concerns. discussion These major ETFs are buying bitcoin at a staggering rate. astounding The rates are incredibly low and they can amass some of the biggest Bitcoin stocks in the world overnight. What will happen if the global community collectively purchases more Bitcoins than they do?
We are heading into an era of a situation Where demand is very high but supply is not sufficient to meet the demands. Business Insider The upcoming half-off is called a “momentous event”Consider that ETF made “permanent changes to Bitcoin’s underlying infrastructure.” Shares are available for Coinshares echoed James Butterfill, Head of Research at the University of Oxford, echoed these sentiments by warning that a positive shock to demand is imminent. “The launch of multiple spot bitcoin ETFs on January 11 has led to an average daily demand of 4500 bitcoins (trading days only), while only an average of 921 new bitcoin were minted per day.” That’s just the rate of mining before halving. ETFs are already depending on the sale of secondhand Bitcoin to replenish their coffers. This trend will only increase.
But isn’t it a positive thing? As a general rule, positive demand shocks are generally Prices can also increase. Bitcoin does not have to be a part of the global economy for shocks in price like these. The negative effects are not likely to be experienced just yet. In other words: the general answer is “yes”, but it can cause alarming tendencies. On the evening of March 18, for example, a bewildering trend was observed. developmentIn a blink, Bitcoin value at BitMEX dropped below $9k. Although the exchange was isolated, it is still a remarkable development. The Bitcoin price rose quickly, and in no way was this a typical event.
BitMEX said that the cause of this spike in price was due to a large number of sell orders placed during the night. They were currently investigating. These sales are likely to be the work of anonymous whales. It’s still unclear who these whales are and who bought bitcoins so quickly, but this is just one example of what can happen when major selling occurs. The fact is, the one-off episode was only an extreme example of what’s happening in general. trend; “constant” Bitcoin suffers from a nosebleed. The market fell to $62k in the afternoon on Tuesday, while the price was near $72k Friday morning.
The traders have remained utterly optimistic, however, that the price drops are just a temporary dip in prices. “bear trap” There are many others who have been affected by the pre-halving climate. Binance CEO Richard Teng, and Crypto.com’s CEO Kris Marszalek are among the prominent executives who have been involved. endorsed The belief that such price drops are temporary and perfectly normal is a common one. Price drops of 20-40% are clearly visible in the week prior to any recent halving. Yet, it bounced right back, quickly, to reach new heights.
In other words some recent, sudden and steep price drops can be explained by data from Bitcoin’s past. We must ask ourselves if Bitcoin will continue to follow this same path in the future. In the end, all signs indicate a very positive outlook for the long term. The positive demand caused by ETF purchases and the halving could make it harder for consumers to purchase bitcoin. But how? Prices will rise. A big selling point for the ETF, is that many consumers prefer to use it as a way to gain exposure to Bitcoin’s profit, instead of holding bitcoin directly. It is this factor alone that will motivate ETF issuers keep the pressure on them to buy. This market condition is not predictable and neither are the implications for bitcoin as currency. But, it seems that Bitcoin will keep on growing.
The community has been preparing for a long time. welcome With such anticipation, are you dreading the half-size? The industry leaders are doing their best to prepare. “The Biggest Celebration in Bitcoin” Live coverage of Bitcoin and Meetup Events in Seven Countries (and Counting) is expected to continue for at least another month. Bitcoin could very well be remembered in 2024 as the year it became fully integrated into the global economy. financial Infrastructure, if the stunning victories of January are followed by unprecedented growth in December. The main concern here is whether Bitcoin’s value in fiat will diminish its use as currency. The signs are clear that Bitcoin will be a major player in the coming years.
“This article is not financial advice.”
“Always do your own research before making any type of investment.”
“ItsDailyCrypto is not responsible for any activities you perform outside ItsDailyCrypto.”
Source: bitcoinmagazine.com