BITCOIN HALVING
It rallied from $42,000 in January to $72,000 by March 12 to set a new all-time-high (ATH), a week after its ATH of $70,000 breaking the 2021 record of $68,729, while the U.S. Federal Reserve kept interest rates unchanged in its March 19-20 meeting, two key factors can be attributed to bitcoin’s positive performance and bringing the bulls back to crypto.
First, the U.S. SEC approved 11 spot bitcoin exchange-traded funds (ETFs) in January, after several months of delay.The approval has helped to consolidate BTC’s position as a global asset class, regaining some of the public confidence lost following the FTX bankruptcy.
Blackrock's bitcoin ETF was the fastest growing ETF in history to hit the $10 billion mark in funds under management, in less than two months, and is now lauded by many as trust in new digital technology is strengthened.
The second factor is that the ETFs arrived just before the 4th Bitcoin Halving event, expected sometime mid-April. For the uninitiated, bitcoin halving is the process by which the Bitcoin network algorithmically reduces the block rewards that miners receive for validating each block of the network by half every 210,000 blocks roughly every four years.
This deflationary mechanism reduces bitcoin’s supply and sometime in April mining production will reduce from 900 to 450 BTC daily. Halving usually has a positive impact on BTC prices and this one is likely to be the most consequential halving in bitcoin’s history.
"The bitcoin halving event is widely regarded as a significant catalyst for positive price action in the bitcoin market," says Alissa Ostrove, Chief of Staff at CCData, "where the reduction in supply, assuming demand remains constant or increases, can lead to a rise in the price of bitcoin."
The demand impact is the equivalent to buying $8.5 billion of bitcoin every year, or $23 million daily, for the next four years. we are currently witnessing and 2024 could be the year of bitcoin’s public mainstream mass adoption.
