Bitcoin price explosion: Here's what the halving has in store for us!

The future of Bitcoin (BTC) is currently generating significant interest. Recently, some crypto analysts have shared their predictions of a profound shake-up in the market of the leading cryptocurrency. As the Bitcoin (BTC) halving rapidly approaches, they anticipate an “extraordinary supply shock.” These projections suggest significant implications for the price dynamics of the leading crypto and its ecosystem. In this article, we will attempt to explain the implications of a Bitcoin (BTC) supply explosion. This, through the lens of the current context of the leading crypto in the cryptocurrency market.

The Bitcoin (BTC) halving will influence the asset’s price dynamics

As the Bitcoin (BTC) halving set for April 2024 approaches, discussions and speculations about its potential effects on the crypto market are heating up. According to experts in the field, this major crypto event will drive the leading crypto in a bullish trend. Consequently, they expect an explosion in the price of BTC post-halving. Their optimism is based on a fundamental dynamic triggered by this event at the protocol level.

The halving of Bitcoin, which occurs approximately every four years or after 240,000 blocks, results in a significant reduction in the rate of new coin creation. Currently, the network produces 6.25 BTC every 10 minutes, totalling 900 BTC per day. However, after the halving, this production rate will drop to 450 BTC, marking a substantial decrease in available supply. Historically, this reduction in the supply of newly issued coins has contributed to a supply shock. A situation that can lead to a potential increase in demand thereby consequentially leading to an asset price rise.  

Considering these factors, analysts believe that the 2024 BTC halving should reinforce this trend. This is particularly due to the continued growth in Bitcoin demand. The recent approval of several Bitcoin Spot ETFs by the Securities and Exchange Commission (SEC) is, according to them, one of the factors influencing the demand dynamics in the market. This, in a context where regulated custodians such as Coinbase Custody take on the responsibility of protecting investors’ assets. This further enhances accessibility and trust in the market.

While the exact impact of the Bitcoin (BTC) halving remains highly speculative, the convergence of reduced supply and increased institutional interest is a compelling scenario for a potential upward trajectory. This possibility is somewhat reinforced by recent trends observed among issuers of Bitcoin Spot ETFs.

Bitcoin ETF issuers engaged in a BTC accumulation race

Observers of the Bitcoin ecosystem have recently signaled a trend that speaks volumes about their faith in the crypto. Since January, the rise of Bitcoin cash ETFs has triggered a new wave of accumulation. Notably among issuers who are amassing significant amounts of BTC. Analyst Ted, a crypto expert, reveals an accumulation of over 160,000 BTC by cash Bitcoin ETF issuers in a short time.

What makes this trend special is the speed at which these ETFs acquire BTC, notably, a daily influx of about 5,800 BTC. Ted predicts that if this momentum continues, it could soon surpass the pace at which new bitcoins are mined after each halving. This phenomenon, as described by Ted, could trigger an “supply shock of all supply shocks.” A scenario following which demand would far exceed available supply, potentially leading to a substantial rally in the price of Bitcoin (BTC).

It is worth noting the emergence of cash Bitcoin ETF issuers, such as BlackRock and Fidelity, whose positions are quickly catching up with established players like MicroStrategy. Despite MicroStrategy’s significant control of 190,000 BTC, the recent acquisitions by Spot ETFs suggest a shift in the Bitcoin (BTC) accumulation trend. Recent data published by Lookonchain highlight this trend, revealing that Bitcoin ETF issuers acquired 4,189 BTC on February 6 alone. This, while at the same time, the institutional giant Grayscale unloaded 3,427 BTC.

In total, Bitcoin Spot ETF issuers, including BlackRock, Fidelity, Bitwise, and others, now cumulatively hold 659,401 BTC as of February 6. This figure surpasses the holdings of MicroStrategy, signifying a significant shift in the balance of power in BTC accumulation. Nonetheless, it is critical to consider that a portion of these holdings includes assets held by the Grayscale Bitcoin Trust (GBTC), which is gradually being liquidated. This adds yet another layer of complexity to the evolving dynamics of BTC accumulation. What is certain, in any case, is that Bitcoin (BTC) is currently doing well.

Bitcoin (BTC) is riding the wind!

In 2024, Bitcoin (BTC) is experiencing a strong push towards new all-time highs after a tumultuous 2023. From a purely technical perspective, the price of Bitcoin (BTC) is currently hovering around $47,500. In just 24 hours, the leading crypto’s valuation increased by 5.27 % for a weekly rise of 10.30 %. As can be seen, the asset is experiencing a significant resurgence that seems to align with the projections of asset managers like VanEck.

Certainly, the price of the leading crypto is still far from its peak of about $69,000 reached in November 2021. But it is approaching ever closer. If this trend continues, the leading crypto could reach new highs in the coming months, thereby strengthening its position in the global financial market. For that to happen, the asset must break through the $53,000 resistance considered pivotal to open the path to new price records.