The effect of Bitcoin halving is very clear for Bitcoin, but it is hard to predict that in the case of altcoins. Satoshi Nakamoto, the Bitcoin creator, has purposely introduced the concept of Bitcoin halving to help with the shortcomings of Bitcoin in terms of inflation and demand in the network.
However, he would not have imagined the impact Bitcoin halving makes on altcoins. In this blog, let us discuss whether Bitcoin halving is a gift or a curse to the altcoin’s performance.
Impact of Bitcoin Halving on Altcoins
Multiple factors need to be considered to analyze the impact of Bitcoin halving. Moreover, factors like tokenomics, market sentiments, token demand, community support, and USPs are essential to predict the price performance of altcoins in post-halving situations.
Crypto Market Sentiments
Bitcoin plays a significant role in deciding the market conditions and controlling the bullish and bearish status of the market. It is called Bitcoin Dominance, and as of now, that is elevated to a three-year high.
Today, the fear and greed index is at 55, a neutral position between the greed and Fear zone. The market has also entered a correction zone after being bullish for months.
During these bullish months, Bitcoin surged to an all-time high of $73,750.07. As of now, the Bitcoin price has dropped about $61K mark, causing the fall of the overall crypto market.
Based on this connection and Bitcoin’s halving history, it is comprehended that Bitcoin halving leads to a bull run, which will eventually lift the altcoin market as well.
The crypto market and market sentiment are confident about an altcoin boom in the next few months.
Altcoin Price Movements
Altcoins like Ethereum closely move with the Bitcoin movement. Ethereum price has also dropped in value, similar to Bitcoin, and is currently trading at $2,973.08. A similar surging pattern might happen in the post-halving days when Bitcoin price will boom.
While looking at the conditions of Ethereum during the past halving, no major difference in price came during the second halving in 2016. At that time, Ethereum was trading between $12 to $15, but no significant price surge happened in the first six months of halving even though Bitcoin was continuously rising.
The third halving of May 2020 was quite different from the second, as Bitcoin and Ethereum both surged to better prices, eventually setting their all-time highs in November 2021.
The same is true for the case of most altcoins including Solana. Solana has a separate ecosystem and has a different clientele of meme coins. It is supposed to be independent of any other network. But looking at graphs of Bitcoin and Solana, a similar price movement is available, which can’t be denied.
Right now, Solana is in a correction zone where the price is $130.92 after facing a drop of 35% in a month.
Major Factors Driving The Past Halving Surges
At the time of the second halving, the Ethereum price started an upward trend after six months of Bitcoin halving. It was because of the introduction of the Initial Coin Offering. So, the driving force behind the Ethereum surge was ICO rather than halving.
Similarly, during the third Bitcoin halving of 2020, the interest rates were zero because of the ongoing Covid-19. So even at that time, another economic force was needed to push the altcoin price.
Is Bitcoin Halving A Gift To Altcoins?
Based on the price history of altcoins during the past halvings and similar economic events in 2024, a price surge can also be anticipated in the case of altcoins. The financial factors for 2024 include Ethereum ETF, US inflations, and improved crypto regulations that will play a significant role in supporting the post-halving bull run.
It also needs to be noted that many other factors can impact the altcoin prices. As a result, the timing of this bull run can vary from the previous ones.
Even from the history charts, no post-halving bull zone happened immediately after Bitcoin halving. It has to see how long the altcoin investors will have to HODL to see the desired market.
Read More 3 Signs Of Crypto Market Crash After Bitcoin Halving
