With the upcoming halving of Bitcoin, the crypto market is eagerly anticipating its future trajectory. In the past week, there has been a significant price increase for the OG-crypto currency, according to CNBC. The halving process occurs every four years after the creation of 210,000 “blocks” in bitcoin mining and reduces the payout for mining new bitcoins by half. This discourages coin production. The next halving event is expected to take place in April 2020, following the previous one.
For crypto investors, there are three key things to keep in mind before the Bitcoin Halving:
1. Current Bitcoin Bull Run:
The surge in demand for Bitcoin ETFs has been the primary driver behind the price increase of the OG-crypto currency. Additionally, a supply shortage has contributed to the rise in prices. Currently, there is an excess of demand and a shortage of supply for Bitcoin. The upcoming halving will further affect the supply and demand dynamics for Bitcoin, as the reward for mining new blocks will be halved. This is likely to keep the supply of Bitcoin lower than the demand, potentially leading to a sharp increase in prices following the halving. Currently, the price of Bitcoin has surpassed $63,000 and is close to its peak of $68.7K from 27 months ago, showing the increasing interest of traders in Bitcoin.
2. Fed’s March Rate Decision:
The Federal Reserve’s March meeting is crucial in assessing the future trajectory of interest rates. Initially, Fed Chair Jerome Powell predicted three rate cuts in 2024, but recent CPI data suggests a cautious approach. It is unlikely that there will be any rate cuts at the March meeting, but the Fed’s commentary and tone on the economic outlook will be significant. The market is currently expecting rate cuts to begin in September. If Bitcoin prices increase after the halving, it could put pressure on purchasing power. However, any indication of a delay in the Fed’s rate decision could decrease risk appetite, resulting in lower demand for Bitcoin post-halving.
3. Monthly Return on Investment for Bitcoin:
Return on Investment (ROI) is a crucial factor for investors to assess their financial assets. Currently, the ROI for BTC remains strong. Due to its better returns compared to other assets such as gold, oil, and stocks, investors on Wall Street are investing in Bitcoin ETFs. If this trend continues in the next month, it is likely to keep investor interest in Bitcoin high. A higher ROI will also contribute to a stable risk appetite, which could help maintain Bitcoin prices.
In conclusion, with the upcoming halving of Bitcoin, the crypto market is closely watching its future trajectory. The current trends in demand, interest rates, and return on investment will play a significant role in determining the post-halving scenario for Bitcoin.
