Bitcoin (BTC) is currently trading at $66,074 on Tuesday, slightly higher than its price from the previous day, as per data from CoinDesk. The recent fourth bitcoin-halving occurred last Friday, leading to a reduction in the issuance rate of new bitcoins to 3.125 every 10 minutes.
The fact that bitcoin is trading at relatively stable prices post-halving may seem unexpected. Analysts attribute this to the pre-halving surge in price. Interestingly, this marks the first instance in Bitcoin’s history where the price surged before the halving event.
On the other hand, Ethereum is trading at \(3,180, BNB at \)605, and Solana at $154 as reported by CoinDesk.
The halving process involves cutting the issuance rate in half, thereby impacting the generation of new bitcoins. This fundamental change in the cryptocurrency’s blockchain technology aims to slow down the creation of new bitcoins.
With a limited supply of 21 million bitcoins, the decrease in newly minted bitcoins is likely to influence the value of bitcoin.
The subdued price movement following the halving is seen as a reflection of the market already pricing in this event.
Parth Chaturvedi, Investments Lead at CoinSwitch Ventures, suggests that the halving effect was anticipated by the market, leading to minimal volatility around the event.
Chaturvedi further explains, “Overall, prices have retraced from recent highs due to geopolitical uncertainties, but we may witness short-term downward pressure as Miners and ecosystem participants adapt to the new supply dynamics. The fourth halving reduces BTC’s annual inflation rate below that of gold and will encourage more investors to view it as a ‘store of value’ asset class.”
Layer-2 tokens
According to Shivam Thakral, CEO of BuyUcoin, layer 2 tokens have shown better performance compared to bitcoin. Thakral notes, “While Bitcoin didn’t see significant gains post-halving, layer 2 tokens associated with Bitcoin have surpassed its performance. These tokens could continue to excel in the market as more Bitcoin layer 2 projects introduce innovative scalability solutions in the coming weeks.”
Industry experts also predict that bitcoin prices in 2024 will be influenced by external factors.
Sumit Gupta, co-founder of CoinDCX, states, “Historically, Bitcoin price surges post-halvings have coincided with major macroeconomic events like the 2012 European debt crisis, the 2016 ICO boom, and the 2020 COVID-19 pandemic, highlighting the broader impact of economic contexts on crypto markets. The trajectory of Bitcoin prices in 2024 will be shaped by external factors such as geopolitical tensions, economic fluctuations, and technological advancements. Adoption rates and other demand drivers will also play a crucial role in determining the price.”
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news, and a personalized newsfeed – it’s all here, just a click away! Login Now!
Stay updated with Business News, Market Events, Breaking News, and the Latest Updates on Live Mint.
Download The Mint News App for Daily Market Updates.
Published: 23 Apr 2024, 07:24 PM IST
Topics You May Be Interested In