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According to The Block’s, the next halving event is now just two weeks away, or about 2,000 blocks away. Bitcoin halving countdown page.
The estimated countdown is based on Bitcoin’s average block creation time of 10 minutes, and as things stand, it puts the potential date at 1:00 PM ET on April 20th. Bitcoin’s next halving event will see rewards for miners on the network decrease from 6.25 BTC to 3.125 BTC per block.
Bitcoin halving is programmed to occur automatically every 210,000 blocks, or approximately every four years. When a halving event occurs, miners receive 50% less Bitcoin as a reward for every block of transactions they mine and add to the blockchain. However, they continue to earn additional transaction fees for each block mined as usual.
There have been three halving events in Bitcoin history. Block reward inflation was reduced from 50BTC to 25BTC in 2012, then to 12.5BTC in 2016, and then to 6.25BTC at the last halving on May 11, 2020. In the long run, there will only be 21 million Bitcoins in existence.
The halving event will continue until the last Bitcoin is expected to be mined around 2140. After that, miners only earn money from transaction fees.
Bitcoin halving could be ‘priced in’
Historically, Bitcoin halvings have been associated with significant fluctuations in the price of the cryptocurrency. Although not a direct cause and effect relationship, these events often occurred prior to significant upturns in the Bitcoin market.
Whether the Bitcoin halving is “price driven” will be determined each time the event occurs. However, there is one data point that makes the case for “pricing in” this time.
“This is the first halving cycle where Bitcoin has hit an all-time high before the halving, meaning the effects have already been priced in by seasoned traders,” said Coinbase analysts David Duong and David Han. “You can do it,” he said. Block this week.
However, analysts added that there is still a collective belief that the halving could push prices higher and “result in actions that lead to a rebound.”
Impact of the new U.S. spot Bitcoin ETF
This time, Bitcoin is closer to its all-time high compared to previous halvings. “However, the approval of the spot ETF represents a significant change in the supply-demand dynamics of BTC, which could impact the price during and after the halving,” Kaiko noted earlier this week.
Distance from previous high. Image: Kaiko.
“ETFs have seen strong inflows across the board, suggesting there could be an immediate positive impact on prices as supply continues to decline,” Kaiko analysts added. “However, ETFs may also see rapid outflows during periods of market stress, exacerbating selling pressure on the underlying assets. So far we have only had a week of net outflows, but that could change.”
Coinbase analyst David Duong agrees that the current Bitcoin rally is a result of this new phenomenon, amid increased institutional interest and spot ETF inflows that have “irreversibly transformed” the Bitcoin market. I did. “This means that Bitcoin’s response to the upcoming halving may not necessarily reflect its performance in previous cycles,” he added.
Outflows from Grayscale’s converted high-cost GBTC fund appear to be slowing, but spot Bitcoin has been weak since peaking with daily net inflows of $1.05 billion on March 12 as Bitcoin reached an all-time high of $73,836. Overall flows from ETFs are also slowing. , according to The Block’s data dashboard.
March was also a big month for spot Bitcoin ETFs by trading volume, hitting $111 billion, nearly three times February’s total. However, after hitting a record $9.9 billion on March 5, daily trading volume has declined along with the recent decline in Bitcoin prices as Bitcoin broke the previous cycle high of around $69,000 for the first time.
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