With the next halving expected on April 20, analysts and investors are eyeing its impact on Bitcoin’s price. This event will reduce miners’ rewards from 6.25 BTC to 3.125 BTC, cutting Bitcoin’s inflation rate in half to 0.85% a year.
Historically, halvings caused short-term ups and downs but long-term bullish trends. Vincent Maliepaard, Marketing Director at IntoTheBlock, noted that before previous halvings, Bitcoin rallied, then dipped, before ultimately reaching new highs.
This shows that although traders may react to the halving, causing short-term changes, the reduced supply usually lifts the price in the long run.
Also, each halving sees less dramatic price jumps. For example, after the first halving, Bitcoin’s value surged by 4,802%. But with each new halving, these increases become smaller.
Since Bitcoin’s market size is much bigger now, achieving similar jumps would require larger investments. This means future jumps in price might not be as big.
The next halving is unique because Bitcoin has already reached its highest value ever, possibly because big institutions are investing heavily after Bitcoin ETFs got approved. This, along with ETF demand and less Bitcoin available, might make Bitcoin worth even more.
Vincent Maliepaard said, “There is a clear upward trend in the number of large transaction volumes, transactions larger than $100.000, especially since the approval of Bitcoin ETFs. Regarding previous halvings, this metric mostly started going up towards the end of the bull market.”
Also, big crypto investors are buying and holding more Bitcoin, hoping its price will increase. They’re both speculating on short-term gains and planning to keep Bitcoin for its rarity in the long run.
Maliepaard’s latest findings highlight a significant surge in miner flow volume share. Over the past year, it has soared from approximately 4% to over 12%, marking a whopping 200% increase.
This shift in miner flow volume share is noteworthy as it signals a significant alteration in miner behavior, potentially affecting the supply and liquidity dynamics of Bitcoin.
Also Read: Bitcoin Halving Nears: How are Option Traders Positioned?
