2024-02-13 19:18:06
According to crypto investment firm Grayscale, due to events affecting the industry, including the approval of ETFs, this year’s bitcoin halving is unlikely to play out like previous years.
In the past month, the company has successfully transformed its Grayscale Bitcoin Trust (GBTC) fund into the world’s largest Bitcoin ETF. Bitcoin ETFs generated stable net inflows for the first time since their debut in early February; so far, inflows of $2.6 billion have been recorded. According to the company, their introduction may affect the price of BTC as if it were halved twice within a year.
“Assuming a net inflow of $10 million per day into ETFs, dividing that by the daily volume issued ($19 million) gives us roughly 50%, similar to the effects of another halving” – explained in more detail in their blog post.
A bitcoin halving occurs approximately every four years, when the number of newly issued coins is cut in half – as is the reward for bitcoin miners, which will fall from 6.25 BTC to 3.125 BTC this year. Grayscale noted that this event is usually followed by a strong bull market in the following year, but they believe the price increase is not just due to the halving.
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“These periods coincided with significant macroeconomic eventsGrayscale writes, highlighting the recovery in 2020, when governments imposed various financial measures due to the coronavirus pandemic. Although the macroeconomic situation remains uncertain, according to CME Fedwatch, the market currently expects a 50% probability that the Fed will start cutting interest rates in May.
As a result of the bitcoin halving, the less enthusiastic members of the bitcoin miners are usually on the run, as they cannot afford to operate with half the previous BTC reward. And although according to Grayscale, miners may now find themselves at a disadvantage, the good news is that Bitcoin Ordinals may improve their situation somewhat. The company believes that Ordinals will bring new innovations and help address scalability issues.
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