A research report from crypto fund manager Bitwise found that these spot ETFs, short for exchange-traded funds, saw $12.1 billion in inflows during the first quarter. So for the price of Bitcoin to rise, more traders and more money have to flow to the asset. That’s what investors call the “greater fool theory of investing,” since the only way to make money is to sell it to someone who’s more optimistic than you are.
Bitcoin Halving: How It Works And Why It Matters
Bitcoin’s 2024 price surge followed the approval of spot Bitcoin ETFs in the U.S., seen by many as a bellwether for institutional adoption of the cryptocurrency. Bitcoin ETF inflows have also been outpacing the production of Bitcoin miners even before the block reward is halved, further setting up a very different https://www.tokenexus.com/what-is-usd-coin-usdc/ environment. Historically, after previous halving events, the price of Bitcoin has increased—but not immediately, and other factors have played a part. Engaging in thorough research and staying informed about market developments and macroeconomic trends is crucial for making well-informed trading decisions.
Basics of the Bitcoin Network
Bitcoin halving isn’t a big deal for long-term investors, but may have a ‘huge’ impact on one key group, says Columbia professor – CNBC
Bitcoin halving isn’t a big deal for long-term investors, but may have a ‘huge’ impact on one key group, says Columbia professor.
Posted: Fri, 19 Apr 2024 07:00:00 GMT [source]
After all, there’s only one Mona Lisa, only so many Picassos, a limited supply of gold on Earth. The halving in 2020 witnessed a similar pattern, with the price of Bitcoin surging to unprecedented levels in the subsequent months. Similarly, the 2016 halving was preceded by a period of price consolidation, ultimately giving way to a sustained bull run that propelled Bitcoin to new all-time What is Bitcoin Halving highs (ATHs). In the lead up to the 2012 halving, Bitcoin’s price experienced a gradual uptrend, followed by a significant surge in the months that followed. The last such event happened in May 2020, when bitcoin’s price stood at around $8,602, according to CoinMarketCap. While previous pre-halving periods have seen tremendous growth, early indications show this one may be different.
More from CBS News
Some analysts now estimate that around 704,400 coins are already in the hands of ETFs. The first blocks ever mined saw rewards of 50 coins, but this has now dropped following three halvings to 6.25 coins. Baker says investors should be cautious about the next Bitcoin halving. However, analysts at JPMorgan and Deutsche Bank said that the impact of this halving was mostly baked into the current bitcoin prices and there isn’t likely to be a large upward movement in the price in its aftermath. The halving block was mined by ViaBTC, and it was the 840,000th block mined on the Bitcoin network. However, it is interesting to note that the successful miner took home a little over 40 bitcoin or equivalent of more than $2.6 million in block subsidy and fees as their reward, according to data from mempool.space.
Bitcoin Bulls Pause Leveraged Bets as Demand Cools Post-Halving
Bitcoin rises above $69,000 in new record high
- Mining confirms the legitimacy of the transactions in a block and opens a new one.
- On the other hand, while the halving reduces the reward for miners, it equally lowers the supply of new coins without reducing the demand, notes Patricia Trompeter, CEO of cryptocurrency miner Sphere 3D Corp.
- But feedback mechanisms within bitcoin’s code constantly adapt to this by ramping up or down the difficulty of the calculations in response to the total computer power currently dedicated to mining.
- The halving is designed to make bitcoin more scarce, and ostensibly to push bitcoin’s price upward.
- Bitcoin was revolutionary in that it could, for the first time, make a digital product scarce—there will only ever be 21 million Bitcoin.