Bitcoin, the world’s leading cryptocurrency, underwent a programmed reduction in its new coin creation rate on April 19. This event, known as a “halving,” occurs roughly every four years and is designed to slow down the overall supply of Bitcoin as per CoinGecko.
Bitcoin’s dominance is currently 54.14 per cent, an increase of 0.12 per cent over the day, as per Coinmarketcap data.
Following the halving, Bitcoin’s price remained relatively stable, experiencing a slight dip of 0.47 per cent to settle at ₹58,89,117 on Wazirx.
The event was highly anticipated by cryptocurrency enthusiasts who believe it will solidify Bitcoin’s value as a scarce asset. Bitcoin‘s founder, Satoshi Nakamoto, capped the total supply at 21 million coins.
The halving comes after a period of significant price fluctuations for Bitcoin. Bitcoin in March 2024, reached an all-time high of USD 73,803.25 but has since fallen back somewhat. The broader cryptocurrency market has also been buoyed by the recent approval of spot Bitcoin ETFs in the United States and the expectation of lower interest rates.
What do experts believe?
Andrew O’Neill, a crypto analyst at S&P Global, said he was “somewhat sceptical of the lessons that can be taken in terms of price prediction from previous halvings,” as quoted by Reuters.
“It’s only one factor in a multitude of factors that can drive price,” he said.
Ahead of the event, JPMorgan analysts expected Bitcoin’s price to fall after halving as it was “overbought” amid tepid crypto funding, as quoted by Reuters.
“We do not expect bitcoin price increases post halving as it has been already priced in,” JP Morgan analysts wrote this week.
“The markets have priced in the halving, so there wasn’t any major volatility close to the event. But if you see yesterday’s stark contrast in Tech stock prices tanking but crypto prices moving higher; one can understand how crypto is decoupling itself as a new asset class, Parth Chaturvedi, Investments Lead, CoinSwitch Ventures told Mint.
“Broadly prices are lower from their recent highs due to geopolitical tensions, but we can expect near-term downward pressure as Miners and ecosystem participants adjust to the new supply dynamics. The 4th halving brings BTC’s annual inflation to less than gold’s and will further push investors to explore it as a ‘store of value’ asset class,” Chaturvedi added.
What does Bitcoin halving mean?
Bitcoin halving is a pre-destined event written into Bitcoin’s code that happens roughly every four years. It cuts the reward miners get for verifying transactions in half, thereby slowing down the rate at which new bitcoins enter circulation. This mimics scarcity in precious metals, potentially increasing Bitcoin’s value over time as demand remains steady or rises.
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Published: 20 Apr 2024, 06:41 AM IST
