On April 18, 2024, Google Trends data showed that the search popularity for "Bitcoin halving" reached a new high. Nigeria, the Netherlands, Switzerland and Cyprus are most interested in Bitcoin halving.
There is less than one day left until the halving. What do well-known institutions, users, and KOLs think about the halving?
Coinbase
According to the Coinbase x Glassnode Q2 report, compared with past halvings, the current market dynamics of Bitcoin have matured significantly, which may reduce the direct impact of newly produced Bitcoin on market prices. This change is mainly driven by the increase in institutional demand and the widespread adoption of Bitcoin ETFs. The main differences include:
While miners add around 900 Bitcoins to the market every day, Bitcoin ETFs tend to buy more, significantly affecting supply levels and market liquidity;
In addition, ETFs can generate large inflows and outflows that can affect market volatility. These movements can significantly impact price stability and market sentiment, often independently of traditional supply and demand constraints.
In short, ETF flows have had a significant impact on Bitcoin’s availability and demand, and will continue to do so for the foreseeable future.
The report also states that spot Bitcoin ETFs are the fastest-growing ETFs ever. A small allocation to cryptocurrency can significantly improve risk-adjusted returns. From April 2019 to March 2024, the traditional 60/40 return was 33.3%. But adding just 3% of cryptocurrencies increases returns to 52.9%; adding 5% of cryptocurrencies increases returns to 67.0%.
Binance
Binance elaborated on the following predictions in a recent report:
1. Bitcoin halving, which aims to regulate the supply of new BTC tokens, has historically influenced the token’s supply dynamics, market sentiment, and adoption.
2. Halvings tend to increase Bitcoin’s popularity, leading to an increase in price and adoption. They also stimulate discussions related to blockchain technology, Bitcoin network dynamics, and crypto as a unique asset class.
3. While historical patterns show that BTC prices rise and adoption expands in the months following halving events, it is important to note that the upcoming halving in April 2024 has proven to be unprecedented in several important ways.
Binance Investigation
According to new research from Binance, investors are increasingly interested in cryptocurrencies ahead of the upcoming global Bitcoin halving event. The survey of more than 2,000 Australian cryptocurrency investors found that more than 80% of respondents believed the upcoming halving would be positive for the industry, while more than half expected Bitcoin prices to rise directly as a result.
Ben Rose, general manager of Binance Australia and New Zealand, said that the halving has had a positive impact on BTC trading, and almost 80% of Binance Australia users plan to increase their BTC holdings in the near future.
Grayscale
According to an analysis report from asset management firm Grayscale, fundamental changes in the balance of Bitcoin supply and demand could have a greater impact on the cryptocurrency’s price, especially the upcoming halving event.
Historically, halving events are usually followed by a cycle of rising prices. However, a new factor (i.e. ETFs) will also affect Bitcoin’s performance during this year’s halving event in April. The report states: “In addition to the overall positive on-chain fundamentals, Bitcoin’s market structure is favorable for prices after the halving.”
Grayscale reported that the current issuance of new coins per block (mining rewards) is 6.25 bitcoins, which is about $14 billion per year at a price of $43,000. In other words, in order to maintain the current price, $14 billion worth of buying pressure needs to be generated during the same period. "After the halving, these demands will be reduced by half: the issuance of new coins per block will be 3.125 bitcoins, equivalent to a reduction to $7 billion per year, effectively reducing the selling pressure."
After the halving, the mining reward for each block will be reduced to 3.125 bitcoins. In order to cope with cost pressure, miners will usually sell more bitcoin stocks, thereby increasing supply and depressing prices.
Grayscale said that the nine Bitcoin spot ETF products recently launched by Wall Street may "act as a hedge against miner selling pressure." The report said: "Bitcoin ETFs may absorb selling pressure significantly, potentially reshaping Bitcoin's market structure by providing a stable source of new demand, which is beneficial to prices."
Goldman Sachs
Investment banking giant Goldman Sachs warned its clients in a report not to over-interpret Bitcoin's historical halving cycles. The report stated: "Historically, the first three halvings were accompanied by an increase in Bitcoin prices, although the time required to reach historical highs varied greatly. Extrapolation of past cycles and the impact of halvings should be treated with caution given the respective current macroeconomic environments."
Bitwise
Bitwise Asset Management said that historically, BTC price performance has tended to be unsatisfactory in the month following a halving. In an April 16 article, Bitwise pointed out that the BTC price performance was mediocre in the month following the three previous halvings, but in the following year, its price rose by at least three digits.
Among them, in the month after the 2012 halving, BTC rose 9%, but in the following year, it soared 8,839%. A similar situation occurred during the 2016 halving: BTC fell 10% a month later and rose 285% in 2017 to a peak of $20,000; similarly, in the month after the 2020 halving, BTC rose 6%, and then rose 548% in the following year. "The data is limited, but it reveals an interesting pattern that market prices tend to underestimate the long-term impact of halvings," Bitwise wrote.
JPMorgan Chase (JPM)
JPMorgan Chase (JPM) said in a research note on Tuesday that recent weakness in mining stocks ahead of the Bitcoin halving provides investors with an attractive entry point.
The report noted that Bitcoin is up 43% so far this year and 130% in the past six months as "a portion of the typical post-halving rally appears to have been pulled forward." Bitcoin's quadrennial reward halving, which slows the growth of the bitcoin supply, is expected to occur around April 19-20.
The bank said it is particularly bullish on overrated Riot Platforms (RIOT) and Iris Energy (IREN) as the stocks offer attractive relative valuations. “As the Bitcoin halving approaches, we expect increased volatility and volume for both Bitcoin and mining stocks,” the analysts wrote.
Bloomberg
Bloomberg reported that the next Bitcoin halving is expected to occur around April 20, which will halve the amount of Bitcoin that miners can earn by verifying transactions every day. This Bitcoin halving may have an impact of about $10 billion on cryptocurrency miners. In addition, the increasing competition among artificial intelligence companies for preferential electricity rates will also lead to a decline in the revenue of Bitcoin mining companies after the cost surge.
Bernstein
Analysts at research and brokerage firm Bernstein expect Bitcoin to resume its bullish trajectory after the halving and reiterated their target of $150,000 by the end of 2025.
“We expect Bitcoin’s bullish trajectory to resume post-halving, when mining hashrate has adjusted and ETF inflows resume,” Gautam Chhugani and Mahika Sapra wrote in a note to clients on Wednesday. “In addition, we believe that the integration of spot Bitcoin ETH with exchanges, RIAs will continue to provide structural demand for Bitcoin. We still expect Bitcoin to hit a cycle high of $150,000 by 2025.”
Crypto.com
The CEO of cryptocurrency company Crypto.com recently expressed his views on the Bitcoin halving event. He pointed out that the market may experience some selling pressure on Bitcoin during the Bitcoin halving, but he emphasized that the halving event will support the Bitcoin price in the long run.
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