THE 2024 BITCOIN HALVING: A BTC VALUE BOOM OR A SURVIVAL CRISIS
FOR MINERS?
A data driven analysis of the coming Bitcoin halving and the
effect it could have on the market.
With 2024 already underway, the
anticipation in crypto circles is hitting a fever pitch as everyone braces for
Bitcoin’s halving – an event that could reshape its market landscape. It
deserves to be looked into as historically this event sparked transformative
waves across the crypto scene. Knowing what we’ve learned from previous halving’s,
we’re set to steer ahead with a keen eye, making sure our moves are shaped by
those insights. But is this upcoming halving any different? Let’s figure it out.
FROM DIGITAL GOLD TO RARE PLATINUM: BITCOIN’S STORY OF
INCREASING SCARCITY AND VALUE
Bitcoin design is all about making BTC less and less available
over time, keeping inflation in check. There’s a set cap of 21 million Bitcoins
to ever exist, and we’ve already hit the 19.62 million mark. The scarcity of
Bitcoin, with its strictly limited release into the market, is a major reason
why people call it “digital gold” – as both these assets have that “hard
to come by” quality. Thinking of the Bitcoin blockchain as a
ticking clock, we can see that halving occurs every 210,000 blocks, or about
every four years, with the reward for mining new blocks getting chopped in
half. It’s been this way since Bitcoin’s kick-off in 2009, starting at 50 BTC
per block and heading down to 3.125 BTC in 2024.
The Stock-to-Flow ratio, which compares existing supply
to new coins coming in, shows Bitcoin is about to get rarer than a platinum
album. By 2032, after the 2024 and 2030 halvings, Bitcoin’s scarcity will soar,
so it will be even more of a gem than gold.
Bitcoin’s Post-Halving Growth Patterns
Let’s take a stroll down Bitcoin’s memory lane. After
each halving, Bitcoin’s price has skyrocketed. Post the 2012 halving, just 100
days later, the market cap exploded by 342%. Even more impressive, the peak
price hit a staggering $1,152 the next year, an 8,761% leap. Flash forward to 2016: rewards halved from 25 to 12.5 BTC, and the price
soared to $17,760 the following year, a 2,572% jump. The most recent halving in 2020 saw the reward drop to
6.25 BTC, and Bitcoin’s price didn’t disappoint, hitting $67,549 the next year,
marking a solid 594% growth.
If we play armchair mathematicians for a bit, we can
look at how Bitcoin’s growth rate decreased after past halvings – by 70.64%
from halving one to two and by 76.91% from two to three – and average out those
decreases to land at a growth rate decrease of 73.78%. We then slap this onto
the 594.03% growth post the third halving and – voila – we get a speculative
growth rate of 155.79% after the 2024 halving. This means Bitcoin could
potentially hit around $111,807 between one to one and a half years after
the upcoming halving. But let’s be clear: this all is merely speculation and
definitely not something to base your investment decisions on.
MINERS’ SURVIVAL OF THE
FITTEST
For Bitcoin miners, the 2024 halving will be an uphill
battle. With rewards slashed in half, miners operating with outdated equipment
and facing high electricity bills will be caught between a rock and a hard
place. In Italy, for example, mining a single Bitcoin can reach as much as a
luxury Lamborghini Huracán or a Porsche 911 Turbo S, with costs soaring up to
$208,560. The 2024 halving will transform the mining landscape into a scene
reminiscent of ‘The Hunger Games,’ where only the strongest miners, armed with
the most efficient technology and access to affordable energy, will survive.
This halving will be like the ultimate arena, a test of strategy and
resilience, where only those equipped with savvy cost-effective tactics will
emerge as victors in the competitive battleground. So, the 2024 Bitcoin halving is poised to
seriously shake things up, with major changes in mining operations and a
potential big swing in Bitcoin’s price. The forthcoming halving event mingles hard-hitting
economic theories with cutting-edge tech strides, all wrapped up in that
unmistakable crypto allure. Whether you’re mining, hodling, or just watching
from the sidelines, grab your popcorn – this will go down in the books!
BITCOIN HITS $50,000 FOR THE FIRST TIME SINCE 2021
Bitcoin is now less than $19,000 off it’s
all-time high of $69,000.
Bitcoin has surged past the $50,000 mark
today, according to CoinMarketCap data, reaching this milestone for
the first time since December 2021.
The breakthrough marks a significant recovery for Bitcoin, which faced
massive volatility and fluctuations over the last couple years, reaching lows
of around $16,000. Bitcoin’s resilience and upward trajectory underscore its
status as a store of value and a hedge against inflation in todays
grim economic landscape. Investors are closely monitoring Bitcoin’s price
movements, with many viewing the $50,000 level as a crucial psychological
barrier. The surge in Bitcoin’s price reflects renewed confidence in the
asset’s long-term potential and its ability to attract institutional
investment.
This year’s upward price movement has been mainly fueled by spot
Bitcoin ETF demand, which is seeing adoption by mainstream financial
institutions and increasing retail investor participation. The immense amount
of selling pressure by Grayscale’s Bitcoin ETF, in addition to miners selling
off coins, appears to now be almost exhausted. So now with the
inflows for all the other spot Bitcoin ETFs accelerating, buying
demand is far exceeding any current selling pressure.
Also, with the halving event quickly approaching for Bitcoin,
market participants have been vocal about eagerly buying up BTC before the
mining reward gets cut in half, which
is expected to create a supply shock later in the year.
