JuSun
Bitcoin (BTC-USD) is approaching a significant event in its blockchain technology known as the halving, which occurs approximately every four years. This event, set to take place soon, involves a reduction in the rewards granted to miners for verifying transactions by 50%. Consequently, the issuance rate of new bitcoins is halved, potentially leading to an increase in the cryptocurrency’s value if demand remains steady or rises.
With a fixed supply of 21 million bitcoins (BTC-USD), the halving reinforces scarcity by limiting the introduction of new BTC into circulation. Past occurrences of the halving have been associated with notable price surges, with predictions suggesting that the price of bitcoin (BTC-USD) could surpass $115,000 following this event.
However, it is essential to exercise caution as historical patterns indicate that bitcoin’s price tends to fluctuate in the period surrounding the halving. Analysts have noted that BTC prices may experience short-term volatility due to geopolitical tensions and concerns about inflation.
Despite potential short-term price fluctuations, analysts like Mike Colonnese from H.C. Wainwright remain optimistic about the long-term impact of the halving on bitcoin’s price. He anticipates a temporary dip in prices to the range of low-to-mid $50,000s before a potential resurgence and continuation of the bullish trend.
Following the halving, miners are expected to face reduced profitability as their rewards decrease. This halving will lower the reward to 3.125 BTC from the current 6.25 BTC, with the entire halving process projected to conclude in 2140 when the total number of bitcoins in circulation reaches 21 million. Presently, there are approximately 19.7 million BTC in circulation.
Analysts from J.P. Morgan and Deutsche Bank have differing views on the post-halving price impact. While J.P. Morgan’s Nikolaos Panigirtzoglou believes that publicly-traded miners are well-positioned to capitalize on the new environment, Deutsche Bank’s Marion Laboure suggests that the halving’s effects may already be factored into the market. However, expectations of high bitcoin prices persist amid potential ETF approvals for ether (ETH-USD), central bank policies, and regulatory changes.
For more insights on Bitcoin USD, stay tuned.