Crypto

Bitcoin Halving Expected April 20, Could Fuel Price Surge

Crypto.com CEO predicts selling pressure ahead of Bitcoin halving, historical trends suggest bullish impact with a 61% pre-halving price increase.

By Bill Bullington

4/16, 00:32 EDT
Bitcoin / U.S. dollar
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Key Takeaway

  • Bitcoin may see selling pressure as the 'halving' nears, but the event is expected to boost its price long-term.
  • The halving, reducing new Bitcoin supply, historically benefits prices; next expected around April 20.
  • Recent inflows into spot-Bitcoin ETFs in the US contributed to an all-time high of $73,798 last month.

Halving Nears, Market Watches

The crypto community is on high alert as the Bitcoin halving event approaches, expected around April 20. This significant event, which cuts the reward for mining new Bitcoin blocks in half, historically signals a bullish trend for the world's largest cryptocurrency. Kris Marszalek, CEO of Crypto.com, anticipates some selling pressure as the date nears but remains optimistic about the long-term positive impact on Bitcoin's price. Despite a slight 1% dip to $62,400, the anticipation builds, especially considering Bitcoin's recent peak at $73,798, fueled by inflows into spot-Bitcoin ETFs in the US.

Historical Patterns and Speculations

Coinbase's research underscores the speculative nature of the halving's impact, citing a 61% average price increase in the six months before previous halvings and a staggering 348% in the six months following. However, they caution that this relationship, while historically evident, remains speculative with limited evidence. The report also highlights the influence of macroeconomic factors and the recent rally driven more by ETF prospects than halving excitement. Notably, the amount of Bitcoin held by long-term holders is at a historical high, suggesting a potential dampening of sell-off pressures post-halving.

Macro Factors and Miner Adaptation

The broader economic landscape cannot be ignored when considering the halving's impact. Past events coincided with significant economic stimuli, such as the Federal Reserve's response to the Covid-19 crisis, which supported risky assets like Bitcoin. This time, the market is closely watching the Fed's expected rate cuts and the tapering of its quantitative tightening program. For Bitcoin miners, the halving presents both a challenge and an opportunity. Efficient operations like Marathon Digital Holdings are poised to remain profitable, with CEO Fred Thiel highlighting the adaptability of miners to the reduced rewards.

Management Quotes

  • Kris Marszalek, CEO of Crypto.com:

    "As we approach this date there may be some selling coming up due to buy-the-rumor, sell-the-news trading... Over a longer period, the halving will make a 'substantial difference' and is a 'positive development for the market.'" "I expect pretty decent action within the six months following the Bitcoin halving."