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Arguments for Bitcoin's upcoming rush on $80,000

Yesterday, we cited the actions of sharks and whales that have returned to accumulating coins as a source of support for continued growth. Today, we'll look at some more arguments that hint at Bitcoin setting a new price record.

Crypto ETFs

Last week, spot ETFs saw net outflows of $888 million. The reason was increased withdrawals from the Grayscale fund due to high management fees and lower inflows into the other funds.


Image source: twitter.com/biancoresearch

However, yesterday, interest in Bitcoin from ETF buyers returned with renewed vigour at $418 million. This is significantly better than the average of $225 million. Most analysts believe that the trend will intensify over time since institutional players still haven't begun trading in the new instruments, and the main flow of funds is coming from retail investors.


Image source: StormGain infographic

Low activity on the spot market

The main battles between bulls and bears are taking place in the derivative contracts market, which accounts for 70% of total trading volume. The market depth (the volume of placed orders on both sides of the price) on Bitcoin has finally approached the pre-crisis level.


Image source: kaiko.com

That said, of those who directly own Bitcoin, there are still few people willing to part with the coins at current prices. This is clearly seen by the volume of transfers within the network. If it exceeded $1 million on average per week in the previous bull cycle, it now doesn't even reach $200,000.


Image source: glassnode.com

Lack of response to negativity

Bitcoin's institutionalisation has proved to inoculate it against the problems of individual market participants. The arrest of Binance's top managers in Nigeria and yesterday's indictment of the KuCoin crypto exchange and executives (the exchange's annual volume exceeds $1 trillion) by the US Department of Justice for criminal offences did not affect the price.


Image source: StormGain Cryptocurrency Exchange

In the world's largest economy, Bitcoin is now an investment asset and a commodity that investors can access through licensed exchange-traded products. This made the connection to cryptocurrency exchanges more indirect.

Long-term factors

At its last meeting, the Fed reaffirmed its intention to cut its key interest rate by 0.75% in three rounds this year. The first adjustment could take place as early as June. This will reduce demand for Treasury bonds and increase interest in risky assets such as Bitcoin.


Image source: twitter.com/EricBalchunas

In mid-March, JPMorgan reported that volatility-adjusted Bitcoin was already outperforming gold in investors' portfolios by 3.7 times. This clearly demonstrates the outperformance of the two Bitcoin ETFs over the gold (and any other) ETF in terms of investment volume in the first 50 days of trading since launch.


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Stablecoins lose ground

Stablecoins' share of the cryptocurrency market continues to shrink, hitting 5.8% in March. This is the lowest value since November 2021. They are also significantly lagging behind the previous bull run in terms of volume, gathering $1 trillion in February.


Image source: coingecko.com

The first reason for the sector losing ground is the launch of spot Bitcoin ETFs in the United States. Traders from popular platforms received access to Bitcoin's volatility while bypassing the crypto exchanges.


Image source: StormGain Cryptocurrency Exchange

The base currency for settling transactions on crypto exchanges is generally stablecoins. For licensed brokers, it's usually fiat currency. In March, the volume of ETFs set a new record at $111 billion.


Image source: twitter.com/EricBalchunas

The second reason is the drop in trust in stablecoin issuers. In May 2022, the Terra project's UST, the third-largest stablecoin by capitalisation, collapsed. In February 2023, after receiving a pre-trial enforcement action, the issuer of BUSD decided not to mint any more of the token. The following month, USDC from Circle was on the verge of folding as a result of the collapse of the bank holdings its reserves in the United States.

The impact of these events on investor sentiment is clearly reflected by the volume of stablecoin supply on crypto exchanges (data on the Ethereum blockchain):


Image source: glassnode.com

At the same time, USDT's share increased to 70%, and its capitalisation rose to $105 billion.


Image source: defillama.com

This significantly increases systemic risks since the community doesn't have reliable information about the banks they use or the quality of reserves. Tether's (non-audited) financial statements continue to list "other investments" and "collateralised loans" totalling $8.5 billion.

The company's balance sheets are so opaque that the Seychelles-headquartered crypto exchange OKX refused to work with USDT in the EU due to potential claims from regulators. As a result of the adoption of the MiCA law, other operators in Europe are likely to follow this example.

Some market participants call stablecoins an oxymoron because they aren't stable. Thanks to the appearance of investment products such as spot Bitcoin ETFs and the lack of strict regulatory control, the sector's share will likely continue to shrink.


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Is it worth investing in super-profitable memecoins?

CoinGecko compared cryptocurrencies by price returns. Their selection included the following groups:

- Memecoins and shitcoins that don't offer any practical purpose
- RWA: crypto versions of real-world assets, such as gold or bonds
- AI: tokens of platforms that work with artificial intelligence
- DeFi: tokens of decentralised finance platforms
- DePIN: tokens of platforms that perform decentralised physical infrastructure projects
- GameFi: tokens of platforms from the gaming industry
- Layer-1: coins from layer-1 networks (Bitcoin, Ethereum, Solana, etc.)
- Layer-2: coins from layer-2 networks (Arbitrum, Optimism, etc.)

Among these groups, memecoins won by a wide margin in Q1, rising by an aggregate of 1313%. RWA took second place with a 286% increase, and AI tokens rounded out the top three with a 222% growth.


Image source: coingecko.com

Despite the amazing performance of Bitcoin Cash (131%) and Stacks (143%), layer-1 and layer-2 coins turned out to be outsiders. Their growth rates pale in comparison with memecoin leaders Brett (7728%) and Dogwifhat (2721%).


Image source: coingecko.com

However, CoinGecko's study makes a significant assumption: only the top-10 largest coins by capitalisation at the end of the quarter for each group are included in the analysis. In other words, hundreds of thousands of memecoins that appeared during the period under review weren't included in the report.

On the Solana blockchain alone, approximately 500,000 quasi-tokens were minted. The vast majority of them were dead on arrival. If the analysis had included all coins in the groups it presented, meme coins would be located at the bottom of the list.


Image source: solscan.io

The minting mania to try to create a profitable token reached such proportions that on 6 February, Solana was down for five hours. The network's founder, Anatoly Yakovenko, explained this hobby in an interview with CoinDesk as "people being terminally online and kind of having nothing better to do."


Image source: StormGain Cryptocurrency Exchange

It's worth noting for inexperienced users that the Ordinals protocol, which appeared in early 2023, made it possible to mint NFTs and quasi-tokens on almost any network. On the Bitcoin network, this caused fees to rise above $30, and users quickly cooled to them. However, Solana, which has sub-penny costs, appealed to the horde of 'degens' (the nickname for lovers of freshly minted meme coins on social media).


Image source: coingecko.com

Dogecoin stood out from among these meme coins. It has its own blockchain, is supported by miners, is the most decentralised and has the largest and most experienced army of fans. It also saw some pretty decent upward movement in Q1 as it more than doubled its price.


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Spot crypto trading volumes at a three-year high

Cryptocurrency spot trading volume jumped 108% to $2.9 trillion in March. This is the best performance since May 2021.


Image source: ccdata.io

This activity is due to Bitcoin setting a new all-time high and an influx of investors eager to participate in the new rally.


Image source: StormGain Cryptocurrency Exchange

Spot Bitcoin ETFs played a leading role in the explosive growth, attracting $12.3 billion in investments in less than four months. Trade volume on them is growing month by month, reaching $111 billion in March.


Image source: twitter.com/EricBalchunas

Trade volume in derivative contracts also grew significantly, gaining $6.2 trillion. Compared to February, that was an 86.5% increase. Meanwhile, the share of this segment fell to 67.8%, the lowest level since December 2022.


Image source: ccdata.io

The rise in the share of spot trading is predominantly driven by investors' desire to move cryptocurrency to cold wallets after buying it. As a result, cryptocurrency exchanges' reserves have fallen by 7.6% to 1.945 million BTC since the end of January. This indicates that trading participants expect Bitcoin's price to rise further.


Image source: cryptoquant.com

On 29 March, open interest in Bitcoin in the futures market set a new record of $36.3 billion. Notably, the Chicago Mercantile Exchange continues to outperform Binance at $11.7 billion and $8.4 billion, respectively. This suggests increased interest in Bitcoin from institutional players.


Image source: coinglass.com

The cryptocurrency market continues to gain momentum as measured by trading activity. It's possible that new records will be set in April due to the market's reaction to Bitcoin's halving event and the expected increase in volatility.


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VanEck: The Ethereum L2 network will hit $1 trillion by 2030

Ethereum is the most secure and decentralised environment for executing smart contracts, although it has low bandwidth and high fees. When addressing this problem, developers emphasised the development of Layer-2 (L2) networks. These networks process transactions quickly and cheaply, and Ethereum is used as a security guarantor by transmitting compressed packets of information (convolutions) to L1.

The demand for L2 is growing every month, causing ETH's share of total transaction volume in the Ethereum ecosystem to steadily decline.


Image source: vaneck.com

To move in the chosen direction, the Dencun hardfork was implemented on 13 March. Because of this hardfork, the information from L2 is now recorded at a separate level in so-called blob objects. This has reduced commissions on L2 by more than 90%.


Image source: vaneck.com

As a result, interest in L2 soared to unprecedented heights over the course of a month, and now Base (Coinbase's network) has surpassed Ethereum in the number of transactions over the last 30 days, increasing the number of active users in March from 19,000 to 171,000.


Image source: dune.com

The total value of L2 networks has nearly doubled to $41 billion this year, with investment firm VanEck predicting that the figure will rise to $1 trillion by 2030. If the forecast comes true, it'll be a growth driver for Ethereum, but it also contains potential risks.


Image source: StormGain Cryptocurrency Exchange

Developers are mainly concerned that ETH itself is increasingly being used for staking. The number of active validators is approaching 1 million, and the volume of blocked ETH has exceeded a quarter of the total supply.


Image source: validatorqueue.com

The growth of validators leads to network congestion due to increased messages, while the growth of staking coins entails systemic risks due to a bloated liquid betting market (when a token of a particular platform is issued in exchange for staked ETH). For example, Lido Finance alone has a 72% share in this market segment with a total staked value of $32.7 billion.


Image source: defillama.com

The development of L2 networks exacerbates these problems as activity on Ethereum's first layer declines. To solve them, the developers propose introducing a limit on the profitability of staking when a threshold on the number of validators or staked ETH is reached.

The community reacted negatively because this approach is strongly similar to central bank monetary policy. A solution that's acceptable to all has yet to be found.


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Bitcoin's on the verge of a major correction

Spot ETFs are the leading reason why people are investing in Bitcoin. However, inflows are falling, with only $485 million coming in over the past week compared to a daily average of over $200 million. Moreover, net inflows fell into negative territory again yesterday, hitting -$224 million.


Image source: StormGain infographic

In March, a similar move was followed by a 9% correction.


Image source: StormGain Cryptocurrency Exchange

Bitcoin's biggest support group, long-term holders (LTH), is continuing to sell off Bitcoin to lock in profits. If we exclude the Grayscale fund, whose outflows persist due to high management fees, since December, LTHs have sold 614,000 BTC. That's 95,000 BTC more than has been accumulated by the newly created ETFs, with BlackRock at the head of the pack.


Image source: glassnode.com

The market is also under tangible pressure from miners, who have realised record volume on the OTC market since August 2023. Sales peaked at the end of March with 1,600 BTC per day.


Image source: twitter.com/cryptoquant_com

At the same time, the fear and greed indicator is near its maximum marks. This suggests that some market participants are overly optimistic.


Image source: alternative.me

They are mostly pushing back on the notion that Bitcoin's impending halving event is a surefire reason for its price to increase. The disadvantage of such an assessment is that this procedure has a long-term effect, whereas, in the medium term, other arguments may take over, such as the cryptocurrency being overbought due to excessive optimism. Things aren't so smooth, even statistically speaking. In 2016, Bitcoin's price didn't increase until 9 months after the halving event.


Image source: kaiko.com

This time, the coin hitting a new all-time high before the halving event is exacerbating the situation. This encourages cautious investors to take profits near current highs without waiting for a potential correction.

Another difference in the current cycle is that the maximum relative drawdown (so far) has only reached 22%, whereas in the past, it has ranged from 40% to 70%.


Image source: glassnode.com

BitMEX co-founder Arthur Hayes believes that excessive expectations of the halving event could cause the price to crash by half in April.

"When most market participants agree on a certain outcome, the opposite usually occurs."


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Bitcoin's rally repeats patterns from 2021

After hitting a then-all-time high in 2021, spot Bitcoin trade volume hit $14 billion per day. The all-time high set this year was also accompanied by a surge in trade volume.


Image source: glassnode.com

Another striking similarity is the fact that Bitcoin hit the 'pre-euphoria' and 'euphoria' zones when Bitcoin held in profit exceeds one standard deviation.


Image source: glassnode.com

What clearly differentiates these two cycles is the driving force behind them. In 2021, the primary inflow of investments came from institutional investors, while retail purchasers actively used crypto exchanges whose total reserves were 2.9 billion BTC.


Image source: BofA Research

This time, demand primarily came from retail investors, while new ETFs accounted for 30% of spot Bitcoin trade volume. Crypto exchanges' reserves are steadily declining and have already reached 1.94 million BTC.


Image source: cryptoquant.com

The impact of ETFs on spot trading is evident in the decline in market activity on weekends and holidays in the United States, when exchange-traded funds are closed.


Image source: glassnode.com

From this, we can draw a simple conclusion: to assess the prospects of Bitcoin's price continuing to rise, we should look at the influx of capital into ETFs and consider other traditional metrics.


Image source: StormGain infographic

During the past two weeks, it's been significantly below the average at $203 million. What's more, the past two days have seen an outflow of funds. This is primarily due to investors leaving Grayscale's fund because it has the highest management fee at 1.5%. In addition to this, Ark Invest's fund also saw an outflow of funds in April, and other ETFs experienced lower inflows.


Image source: StormGain Cryptocurrency Exchange

This, combined with long-term holders and miners selling off their reserves, creates the basis for a correction to form. If we take into account the similarity of the current cycle with the one from 2021, the potential drawdown could be 30% in the 'euphoria' zone. From the all-time high Bitcoin reached, the maximum drawdown target would be around $52,000.


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Cardano drops out of the Top 10

The once very promising project known as the "Ethereum killer" continues to lose points in the crypto arena. According to CoinGecko's ranking, Cardano is now in 11th place by market capitalisation, coming in at $20.6 billion. It reached its peak capitalisation in 2021 when it hit $91.6 billion.


Image source: coingecko.com

Note: On CoinMarketCap, Cardano was still in the Top 10 since Lido's stETH, which has a market capitalisation of $33.6 billion, is not listed there.

In April, Cardano was definitively pushed out of 10th place by Toncoin, which has managed to increase its capitalisation from $3 billion to $25 billion in 12 months. However, Cardano's collapse started back in 2021, when it turned out that the "Ethereum killer" wasn't capable of properly working with smart contracts. After the Alonzo hardfork, the network's capitalisation and the price of ADA plummeted.


Image source: StormGain Cryptocurrency Exchange

The project's developers needed over a year to resolve the situation. Cardano missed its moment to consolidate its success, and it lost its spot to blockchains with more successful architectures. Now, along with networks such as Solana or L2 on Ethereum, Cardano no longer looks innovative. At least that's the assessment held by Grayscale, whose legal successes in 2023 opened the door to spot ETFs in the United States.

In July 2021, Grayscale added Cardano to its digital crypto fund, and in September, Alonzo identified network congestion after enabling support for smart contracts. The team believed in the product until the bitter end, but on 3 April 2024, Cardano was removed from the fund.


Image source: twitter.com/Grayscale

Cardano's problem is the lack of forward momentum. The network still doesn't support widely accepted stablecoins such as USDT and USDC. Instead, it introduced its own coin, Djed, whose capitalisation has been hovering around $3-4 million for a year now. Analytical agency K33 Research believes the lack of integration will lead Cardano to be completely forgotten.


Image source: k33.com

In the DeFi sector, the network dropped to 18th place with $385 million in total value locked (TVL). For comparison, Base, which launched last year, already has $1.5 billion.

Cardano's founder, Charles Hoskinson, always defends the network by pointing to the community's cohesion, but statistics on developer activity indicate the opposite.


Image source: tokenterminal.com

The combination of negative factors and investor disappointment has led to ADA missing out on this year's rally. Instead, it's trading down 2%.


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Why Bitcoin's fee is growing so much in April

The Ordinals protocol, which appeared in 2023 due to the numbering of satoshis, allowed digital objects such as NFTs (an analogue to ERC-721) and quasi-tokens (an analogue to ERC-20) to be transmitted over the Bitcoin network. The resulting boom in all sorts of meme coins died down a year after the protocol was introduced, and the fee for a simple transaction returned to the range of $0.50-$2.00.


Image source: bitinfocharts.com

The calm didn't last long. In April, meme coins experienced a new boom on the network. Over the past week, Bitcoin ordinals have taken the top two spots in the overall collections ranking, pushing back both Solana and Ethereum.


Image source: cryptoslam.io

Since the Bitcoin network doesn't boast high performance, the significant spike in the number of transactions has led to higher fees. Right now, you'll have to pay about $10 for a simple transfer.


Image source: mempool.space

But that's far from the limit. It's highly likely that minting and exchanging ordinals will continue to rise due to the approaching halving. Commission costs will peak on Halving Day (which is tentatively expected to occur on 19 April) as digital objects minted in the first block of the new era will gain collector value.


Image source: coinwarz.com

When it comes to the price of Bitcoin itself, the ordinal hype has no noticeable effect on it.


Image source: StormGain Cryptocurrency Exchange

The beneficiaries of the hype are miners, whose revenue grows significantly due to network utilisation.


Image source: hashrateindex.com

Yesterday, the share of transaction processing revenue soared to 28.5% of the block mining reward. In other words, in addition to 6.25 BTC for the block itself, some miners received 1.78 BTC for including transactions in it.

For crypto miners, ordinals can be a great help as they'll keep revenues relatively high post-halving.


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Bitcoin sees new growth factors

This year, US spot Bitcoin ETFs have made up 75% of investment inflows into the cryptocurrency. Their combined balance now totals $12.5 billion, and the US share of global inflows into crypto ETFs exceeds 95%.


Image source: farside.co.uk

Interest in ETFs has been so strong that BlackRock's fund has become the fastest-growing fund in history. It has accumulated $15.3 billion over the past three months. Note: The large discrepancy with the funds' total balance is due to the $16.3 billion outflow from Grayscale.


Image source: twitter.com/thomas_fahrer

A similar influx of investment in cryptocurrency is now expected from the emergence of spot ETFs in China. According to an insider from Bloomberg, the Hong Kong SEC may make an affirmative decision in the coming days.

China may be the second-largest economy in the world, but it's also fairly closed off to capital outflow. The stock market is the primary direction for investments. It's been showing negative movement since 2021. At the same time, a combination of factors indicates the potential for an even greater decline due to the crisis in the real estate market.


Image source: investing.com

This explains the incredible rise of ETFs with stocks of gold mining companies in April, with the premium jumping 30% relative to the value of the underlying assets. Fearing new financial turmoil, the Chinese are investing in assets that are least connected to the domestic economy.


Image source: bloomberg.com

For the same reason, they may show significant interest in Bitcoin ETFs. For Chinese residents, ETFs will be the best choice since crypto transactions on the mainland are undesirable and will be completely prohibited for financial organisations starting in 2021.


Image source: StormGain Cryptocurrency Exchange

Whales were among the first to prepare for the emergence of a new catalyst. Over the past 30 days, the number of addresses with a balance of over 1,000 BTC has risen by 2.6% to 2124.


Image source: lookintobitcoin.com

After SEC approval, it will take approximately 1-2 weeks before the new ETFs become available for investment. If there's significant demand from Chinese investors, Bitcoin will quickly conquer new heights in May.


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Hong Kong won't help. Bitcoin's correction picks up pace

Last week, the outflow from ETFs reached $126 million, with spot ETFs in the United States accounting for $83 million of that. Yesterday, this trend only consolidated further after experiencing another $37 million loss.


Image source: StormGain infographic

Since long-term holders and miners are continuing to reduce their reserves, the price has taken a downward turn. As of today, Bitcoin has fallen by 15% from the high it reached in March.


Image source: StormGain Cryptocurrency Exchange

In April, a new argument emerged for the end of the cryptocurrency's correction: the launch of spot ETFs in Hong Kong in the next two weeks. This factor is ambiguous, however. Bloomberg's Eric Balchunas says that, in the best-case scenario, the Chinese financial product will garner $500 million in investments.

The primary reasons for the pessimism lie in the following:

- Hong Kong's entire ETF market is only worth $50 billion. For comparison, BlackRock's Bitcoin ETF alone has attracted $15.3 billion in three months.
- Investors in mainland China won't have access to the ETFs.

The latter circumstance puts an end to optimistic forecasts of an influx of billions of dollars, even taking into account some loopholes that allow enterprising citizens to invest in Hong Kong-based products.

The potential for the emergence of spot ETFs is clearly visible in the influx of investments in futures ETFs that were much earlier, just as in the United States. The total assets under management (AUM) in Hong Kong crypto ETFs is a modest $170 million. In the US, BITO alone has raised $2.8 billion.


Image source: StormGain infographic

We wrote about the impact of halving and the risk of a correction as a result of it on 1 April. According to the analytical agency 10x Research, the lower income will force miners to reduce reserves by $5 billion within 4-6 months after the halving. All other things being equal, this will create conditions for at least Bitcoin to consolidate in the medium term.


Image source: twitter.com/10x_Research

Last week, the only ETF to see an outflow of funds was Grayscale, whose management fee is 5-6 times higher than competitors.


Image source: farside.co.uk

If investors in other funds start to panic, the correction will easily reach the usual 30-40%, and Bitcoin's price will drop to around $50,000.


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Bitcoin After Halving 2024: What's Next?

With the countdown to the Bitcoin halving event of 2024 underway, the cryptocurrency community eagerly awaits the implications of this milestone. With the halving date drawing near, let's assess the implications of this event and explore its potential impact on Bitcoin's future trajectory and price.

"Gold is a great way to preserve wealth, but it is hard to move around. You do need some kind of alternative, and Bitcoin fits the bill. I'm not surprised to see that happening. — James Rickards, investment banker".

What is Bitcoin halving?

Bitcoin halving is an event programmed into the Bitcoin protocol that occurs after every 210,000 blocks mined, which is approximately every four years. During a halving event, the reward that Bitcoin miners receive for validating transactions and adding them to the blockchain is cut in half. This reduction in block rewards serves as a mechanism to control the supply of new bitcoins entering circulation, ultimately contributing to the predetermined limit of 21 million bitcoins.

The process of halving is integral to Bitcoin's deflationary monetary policy, designed to mimic the scarcity characteristic of precious metals like gold. By reducing the rate at which new bitcoins are minted, halving events play a crucial role in managing inflation.

What is Bitcoin halving countdown?

The Bitcoin halving countdown refers to the time remaining until the next scheduled halving event in the Bitcoin network. Various online platforms and websites provide real-time countdown timers, displaying the exact time and date when the next halving is expected to occur. These countdowns are based on the predetermined block height at which the halving will take place, as defined by the Bitcoin protocol.



The Bitcoin halving countdown is closely monitored by the cryptocurrency community due to its potential impact on market dynamics and investor sentiment. As the countdown progresses and the halving event draws nearer, speculation and anticipation often intensify, leading to increased activity in the Bitcoin market.

When is the next Bitcoin halving?

The next halving is due to take place around 20 April 2024. This will be the fourth BTC halving. It will result in a reduction of the block reward to 3.125 BTC per block.

How the halving could impact Bitcoin's price

The halving event can potentially impact Bitcoin's price through several mechanisms.

- Supply reduction. The most immediate impact of halving on the BTC price is a decrease in the rate at which new bitcoins are created. However, it's worth noting that this effect decreases with each subsequent halving.
- Market sentiment. Halving events generate significant media attention and speculation within the cryptocurrency community and beyond. Positive sentiment surrounding the halving may attract new investors and traders who anticipate potential price appreciation. This increased demand could further fuel upward price movements.
- Historical precedence. Previous halving events in Bitcoin's history have been associated with significant price rallies in the months and years following the event. While past performance is not indicative of future results, historical patterns may influence market participants' expectations and behaviour, contributing to price movements around the time of the halving.

Previous Bitcoin halvings and their effect on the BTC price

So far, there have been three Bitcoin halving events, and a fourth is expected soon.


Bitcoin halving dates

The first halving (2012)

The first Bitcoin halving took place on 28 November 2012, reducing the block reward from 50 to 25 bitcoins.

In the months leading up to the halving, speculation and anticipation heightened, with many investors anticipating a bullish trend. Before halving, Bitcoin's price experienced relatively low levels of volatility and trading activity. Following the halving, Bitcoin's price began to steadily rise over the subsequent months, eventually reaching new all-time highs.

The first halving marked the beginning of a significant bull run for Bitcoin, with the price eventually surpassing $1,000 in late 2013.

The second halving (2016)

The second Bitcoin halving occurred on 9 July 2016, reducing the block reward from 25 to 12.5 bitcoins.

Similar to the first halving, anticipation and speculation surrounding the event intensified in the months leading up to the halving date. Post-halving, the price declined for about a month, but then the bull run began, during which Bitcoin's price surged to nearly $20,000 in late 2017.

The third halving (2020)

The third Bitcoin halving took place on 11 May 2020, reducing the block reward from 12.5 to 6.25 bitcoins.

Two months before halving, the crypto market crash occurred due to the Covid-19 pandemic. However, the price managed to recover during the remaining time before the halving. Following the halving, the price moved sideways for a while, but a new bull run began in October 2020, with Bitcoin reaching $69,000 in November 2021.



Predictions for Bitcoin halving 2024

Any predictions regarding the price of cryptocurrencies should be taken with a grain of salt. The same goes for the Bitcoin halving and predictions of what will happen after it in 2024 and beyond. Having said that, it's still possible to make some assumptions about how events may unfold after the fourth halving.

Bitcoin halving 2024 price prediction

Historical analysis of previous Bitcoin halvings reveals recurring patterns and trends that shed light on the potential impact of these events on Bitcoin's price and market dynamics. Although past performance doesn't indicate future results, we can use these patterns as a basis for making predictions about the possible future price of Bitcoin. However, it's important to recognise that market dynamics are complex and are influenced by multiple factors, so predictions based solely on historical data should be approached with caution.

In case the established pattern is repeated, the Bitcoin price is likely to move sideways or even correct for some time after the halving. After that, the bull run will continue and peak approximately by the winter of 2025 at around $150,000-$160,000. The retracement caused by the subsequent bearish trend may bring the price to the levels of $50,000-$65,000.

Will altcoins go up after the Bitcoin halving?

Altcoin prices tend to be highly dependent on the dynamics of Bitcoin's price. If the bull run continues after the halving, altcoins are also expected to go up.

Halving and Bitcoin mining

The reduction in block rewards can have profound implications for miner economics. Since block rewards constitute a significant portion of miners' revenue, the halving event can lead to a decrease in miners' profitability, especially for those operating less efficient mining operations. Miners must adapt to the reduced rewards by optimising their operations, upgrading hardware, or adjusting operational expenses to remain profitable post-halving.

Following a halving event, some miners may choose to exit the network due to decreased profitability. As a result, the network hashrate may decline, leading to longer block times. However, Bitcoin's difficulty adjustment mechanism ensures that the network automatically recalibrates to maintain a target block time of approximately 10 minutes, thereby stabilising the mining ecosystem.



The halving event can lead to shifts in the mining landscape, with some miners ceasing operations while others may continue or increase their mining activities. Miners with access to low-cost electricity and efficient mining hardware are better positioned to weather the post-halving challenges and remain profitable. Consequently, the halving may contribute to centralisation pressures within the mining ecosystem, favouring larger, more established mining operations over smaller participants. However, Bitcoin's growing adoption drives up the price, mitigating the effects of halving and increasing the profitability of mining operations. And Bitcoin's scarcity achieved through the halving mechanism helps with that.


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[Mr. Magkaisa]

      -    For 3 years, you have been the only one who always posts in this section, and no one pays attention to you. You are still constantly posting in this section. What the heck? a kind of mining platform, exchange, or both?

What is that? When you download, you can mine for free. Will you get bitcoin rewards in your wallet account? I just heard the storm you were talking about. and it's scary to try honestly speaking.

[stormgain]

Bitcoin's halving and the second phase of tokenomania

The 840,000th block on the Bitcoin network marked the latest halving and the introduction of the Runes protocol that opened the second memecoin hunting season. Instead of seeing lower revenue, miners encountered record-high growth.

On 20 April, the reward for mining one block was halved from 6.25 BTC to 3.125 BTC, while the network's hashrate hit a record high of 655 EH/s.



In preparation for the event, miners blew the dust off of even low-profitable ASICs. All the hype was due to the expected growth in earnings from processing transactions. Due to limited block capacity, users are forced to pay higher fees to ensure their transaction is processed as quickly as possible. The situation becomes especially acute when there is competition for a specific block.

On 20 April, the average transaction fee skyrocketed to a record-high $128. Miners' commission income for the 840,000th block alone amounted to 37.6 BTC or $2.4 million, and the ratio of the reward for mining a block exceeded 10 to 1. In total, the commission on this day amounted to $78 million. For comparison, Ethereum only saw $3 million in commission.



The excitement was once again associated with meme coins. The Runes protocol, which was designed to replace BRC-20, launched on the same 840,000th block. BRC-20 (which is analogous to ERC-20 in Ethereum) are coins minted within the network and transmitted through the Satoshi numbering.

The problem with BRC-20 is the large increase in UTXO (unspent transaction output), which is why the creator of the Ordinals protocol, Casey Rodarmore, called them spam. He also developed the Runes protocol, which doesn't feature this shortcoming. The key differences between the two approaches are presented here:



Since the matter deals with memecoins that don't carry a payload, one key attribute is the starting block. This explains the high competition and $2.4 million paid in commission. However, interest in minting remains. As of 22 April, 6,843 Runes tokens have already been issued. They see 435,000 transactions made with them every day, which is 69% of the total.



The second phase of token mania had no impact on Bitcoin's value and position.



Interest in Runes will probably fade closer to May, which is what previously happened with Ordinals and BRC-20. In that scenario, commissions would decrease. Miners will have to adapt to a reduction in their overall income.


StormGain Analytical Group (https://stormgain.com/)
(platform for trading, exchanging and storing cryptocurrency)

[stormgain]

Crypto funds see outflow of funds for second week in a row

The recent halving event was characterised by explosive growth in commission thanks to the introduction of the Runes protocol in the same block. The new protocol makes it possible to mint a new subtype of meme coins. The speculative frenzy hasn't run out of steam yet. Runes account for about half of all transactions in the block, which is why the commission for sending a simple transaction now exceeds $15.


Image source: dune.com

However, investment interest in Bitcoin itself has remained lacklustre over the past two weeks. The crypto funds that drove the cryptocurrency market at the beginning of the year are showing an outflow of funds for the second week in a row. During this time, their total balance sheet decreased by $332 million.


Image source: coinshares.com

On the first business day after the halving, inflows into spot ETFs were only a modest $62.2 million.


Image source: StormGain infographic

Investors' caution is related to Bitcoin setting a new record-high before the halving event (for the first time in history) and the forecast by several analysts, with JPMorgan leading the charge, that BTC's price would inevitably correct to $50,000 due to inflated expectations.


Image source: StormGain Cryptocurrency Exchange

Several network metrics confirm the negative sentiment. The rate at which new addresses are appearing has decreased to lows last seen in 2021, while the share of long-term holders has decreased, too. The percentage of coins that have remained idle for over a year has decreased from 70.5% in mid-January to the current 65.9%.


Image source: lookintobitcoin.com

The number of whales (>1,000 BTC) has risen since mid-March but hasn't reached this year's high of 2159 addresses.


Image source: lookintobitcoin.com

Long-term hodlers are locking in profit, and interest in Bitcoin among new investors has significantly slowed. If the trends continue, the cryptocurrency will face a long-term consolidation with the threat of a breakdown into a full-fledged correction. In the current bull cycle, that consolidation is still extremely soft, reaching just 22% in January. Previous rallies saw average drops of 40%.


StormGain Analytical Group (https://stormgain.com/)
(platform for trading, exchanging and storing cryptocurrency)