April 19, 2024 10:36 AM | 3 min read |
The crypto space is fraught with opinions, with celebrities, micro-influencers and community members constantly chiming in to give their take on markets.
This can make it difficult for investors to determine what information is important and relevant. However, when topics are discussed by everyone, all the way up to the largest players in the space, it is likely significant. The upcoming Bitcoin halving is a great example.
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The Bitcoin halving, an event that occurs roughly every four years, is when the amount of new tokens released each block, which typically lasts around 10 minutes, is halved. Effectively, this lowers the amount of selling pressure, as some people will instantly sell new tokens as soon as they receive them. In theory, this should provide strong upward pressure on the price. In the past, the halvings have been a catalyst for price appreciation, sending the token to new highs each time.
So, the halving’s importance is recognized by nearly every Bitcoin enthusiast, as it has significantly impacted the price in the past. Both BlackRock and Coinbase released new blog posts and ad campaigns stressing the importance of this event.
BlackRock is the world’s largest asset manager with a total of $10.5 trillion in assets under management (AUM). It was also one of the firms that released a spot Bitcoin exchange-traded fund (ETF) in January, with its ETF trading under the name IBIT. The ETF has been the most successful of the ETFs, attracting over $17 billion in investment.
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In a blog post earlier this week, Jay Jacobs, BlackRock’s head of Thematic and Active ETFs, said, “Historically, Bitcoin performance has been positive leading into and in the year of and immediately following halving events” but also that “each subsequent halving has had a smaller impact on Bitcoin’s inflation schedule. With about 94% of all Bitcoin already mined, future issuance represents a small fraction of the circulating supply, potentially reducing the comparison to historical halving events. Moreover, Bitcoin has been around since only 2009, so a sample size of just three prior halvings makes it difficult to place confidence in the accuracy of this narrative.”
The blog post described what the halving entails and the historical impacts, ultimately calling investors to take a closer look at the IBIT ETF and consider investing.
Coinbase also released an ad campaign surrounding the halving. The ad shows how many pizzas can be purchased with one Bitcoin, starting with one in 2012 and leading up to a mound of pizzas in 2024. The ad states that “roughly every four years, the future supply of Bitcoin is reduced. So historically, you get more, not less.” The ad has an interesting take on the visual representation of Bitcoin’s price increases, ultimately stating that “Bitcoin moves money forward.”
The halving is undeniably an important event for Bitcoin. This was made apparent through large companies putting huge investments into spreading the word about the halving and calling for investment. With the halving expected to occur today, it will be interesting to see how the price of Bitcoin will react.
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