Bitcoin Cash (BCH) has recently completed its halving in the early morning of April 4 (UTC+8), marking an essential event in the cryptocurrency’s history. With approximately 16 days remaining until the Bitcoin halving, the significance of this event may be reduced due to the recent Bitcoin ETF, as suggested by general analysis.
The Bitcoin halving is a crucial event in the Bitcoin network’s life cycle, occurring approximately every four years, where the mining reward is cut in half. This process helps maintain the scarcity of Bitcoin, which can drive up demand and increase its price, as observed historically. However, the recent Bitcoin ETF may impact the significance of this event, as new entrants into the Bitcoin market could potentially lead to increased demand and higher prices, reducing the emphasis on the halving’s role in driving demand.
The Bitcoin halving is designed to maintain the scarcity of Bitcoin by gradually decreasing the rate at which new Bitcoins are mined, resulting in a total of 21 million Bitcoins being mined, with no more Bitcoins being generated after the final halving event[1]. This process has historically led to positive price action for Bitcoin, with the halving generating optimism among crypto investors and attracting new investors, contributing to increased trading activity
However, the magnitude of these increases may diminish with each subsequent halving, as observed in the distribution of returns, which has narrowed as the bitcoin market has matured. Additionally, the halving event directly impacts the Bitcoin miners, reducing block rewards for new blocks, potentially leading to consolidation within the mining sector.
The current Bitcoin bull run is unique, with Bitcoin surging past its previous peak set in 2021, prior to the upcoming halving in mid-April. This rally is notable for the introduction of spot Bitcoin ETFs on US stock exchanges, a novelty in the digital asset industry.
