Bitcoin Rises 1.8% Post-Halving, Crypto Stocks Surge

Key Takeaway

• Bitcoin rose 1.8% to $65,891.28 post-halving; Ether up 1.5% to $3,198.06, indicating positive market response.
• Major miners like Marathon Digital and Riot Platforms saw premarket gains of 3% and 5%, respectively, after the halving.
• JPMorgan notes potential near-term downside risk for Bitcoin, while larger miners are well-prepared for the halving impact.

Bitcoin Halving Sparks Market Movement

The cryptocurrency market witnessed a notable event last week with Bitcoin's fourth halving, a mechanism designed to reduce the rewards for mining new blocks by half, thereby slowing the issuance of new bitcoins. This event, occurring approximately every four years, is anticipated to create a scarcity effect, likening Bitcoin to digital gold. Following this event, Bitcoin's price saw a modest increase of 1.8%, reaching $65,891.28, while Ether followed suit with a 1.5% rise to $3,198.06. Public cryptocurrency miners, including Marathon Digital and Riot Platforms, experienced premarket gains of about 3% and 5%, respectively, showcasing the immediate market response to the halving.

Miners Adjust to New Realities

The halving event has significant implications for Bitcoin miners, particularly in terms of revenue. Large, publicly-listed mining operations have been bracing for this change, investing in more efficient mining equipment and expanding their electricity capacity to maintain profitability despite the reduced rewards. This preparation positions them to potentially capture greater market share as smaller, less efficient miners may struggle to compete. JPMorgan has expressed concerns over potential near-term downside risks for Bitcoin, highlighting the market's cautious outlook post-halving.

Transaction Fees and Market Dynamics

In the aftermath of the halving, Bitcoin transaction fees have dramatically decreased, with medium-priority transactions dropping to $8.48 from over $146, and high-priority transactions to $9.32 from $170. This reduction in fees could make Bitcoin transactions more appealing, potentially increasing on-chain activity. However, the anticipated boost from the Runes protocol, aimed at creating fungible tokens on Bitcoin, has not materialized as expected. The floor prices for the runestone NFT collection have halved, indicating a lukewarm reception from the market.

Crypto Stocks Outshine Amid Tech Sector Volatility

The halving event has not only impacted the cryptocurrency directly but also influenced related stocks. Crypto-linked stocks surged, with Bitcoin reaching $66,044.35, showcasing the market's optimism towards the halving's long-term effects. Meanwhile, the broader tech sector experienced volatility, with companies like Informatica facing challenges, and Tesla witnessing a significant drop in its stock price, marking its seventh consecutive session of losses. This contrast highlights the diverging paths within the tech and crypto sectors, with the latter gaining momentum from the halving event.

Street Views

• JPMorgan (Neutral on Bitcoin):

  "Many investors have been expecting little price action in bitcoin around the halving itself, as historically it has taken several months to see its impact reflected in the price of bitcoin. However, sees some near term, downside risk in bitcoin."