Bitcoin Breaks $64,000 as Halving Looms

4 Min Read
image 2
bitcoin (btc) price
bitcoin breaks $64,000 as halving looms 3

Bitcoin, the leading cryptocurrency, surged to a new all-time high of $64,000 on Feb. 28, as traders anticipated a further boost from the upcoming halving event.

Bitcoin’s fourth halving is expected to occur on April 17, 2024.

Bitcoin’s block reward is cut in half every 210,000 blocks, or approximately every four years. This means that the amount of Bitcoin mined and the block reward drops by half at every Bitcoin halving event.

The halving, which is expected to occur in early-to-mid April, will reduce the number of new bitcoins created every 10 minutes by half, from 6.25 to 3.125. This will lower the inflation rate of bitcoin and increase its scarcity, potentially driving up its price if demand remains the same or grows.

Many investors and analysts believe that the halving will have a positive impact on bitcoin’s value, as it has in the past. The previous three halvings, in 2012, 2016 and 2020, were followed by significant bull runs that pushed bitcoin to new highs.

Bitcoin has had three previous halvings:

  • First halving: November 28, 2012 
  • Second halving: July 9, 2016 
  • Third halving: May 11, 2020 

Each halving to date has been followed by a major bull run, but a significant pullback came shortly afterwards.

“The theory is that there will be less bitcoin available to buy if miners have less to sell,” said Michael Dubrovsky, a co-founder of PoWx, a crypto research nonprofit.

Some also attribute the recent rally to the growing popularity of bitcoin exchange-traded funds (ETFs), which allow investors to gain exposure to bitcoin without having to buy or store it directly. Several bitcoin ETFs have launched in US,Canada and Brazil, attracting record inflows and volumes.

“From my perspective, the recent rally has aspects of a derivatives driven move combined with an undertone of spot demand off the back of record ETF inflows. Breaking through the $53K region showed relative strength, volumes were high, natural demand was there, and momentum traders had started to pile in to the trade,” said Chris Newhouse, an options analyst.

However, not everyone is convinced that the halving will have a lasting effect on bitcoin’s price. Some technical analysts have warned that bitcoin’s market structure and high funding rates across the market are a sign of heavy leverage use and an eventual advent of a liquidation-driven correction.

“I read many 200K forecasts. Just to note here that we are now close to resistance area between 65K-68K. 3 years ago I drew attention to that resistance. I again draw your attention to the horizontal resistance,” tweeted Aksel Kibar, a certified market technician.

Others have argued that the halving is already priced in by the market, and that other factors, such as regulation, innovation, and adoption, will have a bigger influence on bitcoin’s future performance.

“The halving is a known event, so it should not surprise anyone. The market is efficient and forward-looking, so it should already reflect the expected reduction in supply. What matters more is how the demand for bitcoin will evolve in the coming months and years,” said Alex Tapscott, the co-author of Blockchain Revolution and co-founder of the Blockchain Research Institute.

Bitcoin is currently less than 13% away from its all-time high of $68,900, which it reached in December 2020. Many retail and institutional investors expect the record level to be overtaken before the halving, which is scheduled to occur in roughly 52 days.

Share This Article
What Is Cryptocurrency? Crypto Token: Crypto Coin & Crypto Token: Know The Difference