There are reasons to be bullish

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The Bitcoin network secures more than $1.4 trillion in value.
Bitcoin has a capped supply at 21 million coins – the digital “coins” in “Bitcoin,” with about 19.5 million already in circulation.
Today the Bitcoin network produces and pays out to miners 6.25 Bitcoin every 10 minutes or so, or about 900 coins a day.
After the halving, the reward will drop to 3.125 Bitcoin, or about 450 a day.
When the last halving occurred in 2020, each Bitcoin was valued at around $10,000.
This halving is set against the backdrop of ever-broadening demand for Bitcoin, driven by the popularity of new Bitcoin ETFs.
This helps explain why “the demand for new money coming into Bitcoin will far outpace the available supply of Bitcoin,” said Bill Barhydt, CEO of Abra.
After all, Bitcoin relies on miners to commit huge computing resources to secure the network in exchange for the reward of more Bitcoin.

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Over $1 trillion worth of value is secured by the Bitcoin network. That represents a marginal decrease from the market capitalization of the Taiwan Stock Exchange and a marginal increase over Mega. Exchange-traded funds (ETFs) were recently introduced by financial behemoths like Fidelity and BlackRock to allow regular investors to include Bitcoin in their portfolios.

And this trillion-dollar behemoth will soon undergo a regular, but significant, scheduled upgrade called the halving, which has historically driven a sharp increase in the price of Bitcoin, benefiting its holders. The halving is scheduled to take place in less than a week.

There’s reason to be bullish, but could it happen again?

Since there is no central body controlling Bitcoin, unlike traditional currencies, it is not issued by a government or central bank. Rather, the “monetary policy” of Bitcoin is hardcoded into the program, making it impossible for a corporation, state actor, or influential person to change or tamper with it.

The total number of digital “coins” that make up Bitcoin is limited to 21 million, of which roughly 190.5 million are currently in use. Users who protect transactions and uphold the network’s transaction ledger, or blockchain, are rewarded with new Bitcoin. These users are referred to as “miners.”.

Approximately every ten minutes, or 900 coins per day, the Bitcoin network generates and distributes 6.25 Bitcoin to miners. In order to control supply as the network ages, the network is set up to stop emitting new Bitcoins after 210,000 blocks have been mined.

Similar to how mining for gold is less profitable now than it was in the past because the easiest-to-access supply has already been taken out of the ground. And on or around April 20, we should hit that mining milestone.

Following the 50% reduction, the payout will decrease to 3.15% Bitcoin, or roughly 450 per day. According to BitGo CEO Mike Belshe, “this schedule was set in motion in 2009 and hasn’t veered off course.”. Such consistency is “an amazing accomplishment that proves that Bitcoin is more trustworthy than ever,” in his words. “.

Furthermore, a shortage in the quantity of Bitcoin available for purchase due to the halving might drive up the price significantly. Imagine a scenario in which demand remained constant but the world’s oil wells produced only half as much crude as previously.

This clarifies why previous Bitcoin halvings have fueled the cryptocurrency’s upward trajectory. The value of a single Bitcoin was approximately $10,000 in 2020, the year of the last halving. It reached a peak of $67,000 in the ensuing two years. With Bitcoin rising from $665 at the time of the halving to a high of over $17,000 two years later, the post-2016 halving rally was even more spectacular.

Due to the growing popularity of new Bitcoin ETFs, there is a constant demand for Bitcoin, which is why this halving is taking place. With over $11 billion in new capital raised since January, Bitcoin ETFs have become the most successful ETF launch in history.

With nearly one-third of Americans owning or having some kind of indirect investment in Bitcoin today—far more than during the previous halving in 2020—the response to the halving in 2024 may be both more vocal and widespread.

The security and ease of use of Bitcoin have made it indispensable to tens of millions of people worldwide, including migrant workers, the underbanked in the global South, victims of political oppression, and an increasing number of American investors and savers.

The CEO and founder of the advocacy group Digital Chamber, Perianne Boring, stated: “Bitcoin is becoming a useful tool for people looking for refuge as people all over the world deal with the effects of extreme inflation. It makes sense that the digital economy should have its own digital store of value and medium of exchange given the increasing amount of economic activity that takes place online.

Still, Bitcoin’s usefulness and dependability are even more impressive than its widespread use. Since the network’s launch in 2009, 99.99% of the time it has operated according to plan. This adds to the understanding of why Bill Barhydt, CEO of Abra, predicted that “the demand for new money coming into Bitcoin will far outpace the available supply of Bitcoin.”.

Although investors may benefit from the halving in general, there are reasons to be concerned that it might also undermine Bitcoin’s long-term security model. After all, in order to secure the network and earn more Bitcoin, miners must dedicate enormous amounts of processing power to this task. How will the reward be altered if it is halved now?

While miners’ expenses won’t go down, their income might if the price of bitcoin doesn’t keep rising. In the unlikely event that it doesn’t, miners may be forced to halt operations indefinitely or even completely while they wait for value increases to resume.

Less computing power due to fewer miners could result in a network that is possibly more concentrated and vulnerable. And this worry will undoubtedly grow in light of upcoming halvings.

For the time being, Bitcoin owners see this as an ethereal issue that will be resolved eventually. For now, they’re happy to watch as Bitcoin—possibly the most audacious financial and technological endeavor of our time—achieves yet another significant milestone.

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