Every few years, a significant event captivates the crypto world: Bitcoin halving. This eagerly anticipated occurrence slashes the rewards for Bitcoin miners in half, directly impacting the rate of production and the available supply. With the upcoming halving scheduled for 2024, speculation is mounting about its potential effects on the wider crypto market.
The looming question is: Will prices soar due to the reduction in new coin supply, or will the dwindling rewards undermine the crypto’s mining infrastructure? While the exact outcomes are uncertain, one thing is certain—this year’s halving will reverberate throughout the industry.
As enthusiasts and investors eagerly await this pivotal moment, many wonder about the associated rewards and risks. How significantly will this programmed adjustment impact cryptocurrency mining? Could it possibly drive Bitcoin value to previously unheard-of heights?
Technically, Bitcoin halving is a built-in mechanism within the core code of the coin that halves the rate of new coins’ creation every 210,000 mined blocks, occurring roughly every four years. Events involving halving have in the past caused significant fluctuations in the price of Bitcoin. In the past, scarcity brought about by a decrease in the rate of new Bitcoin circulation has raised prices.
However, each Bitcoin cycle is different from the last, and there are significant fluctuations in the market at each halving event. Bitcoin seems to take longer to reach new highs with every cycle. All things considered, the historical trajectory of Bitcoin points to a tendency for it to replicate cycles that have already been formed.
Bitsgap CEO Max Kalmykov predicts that as the halving draws near, traders will likely become more active. Kalmykov observes a rise in trading activity, leading to a greater reliance on artificial intelligence (AI) bots and tools, such as those developed by Bitsgap. These technologies, which are especially helpful to scalpers, enable traders to carry out more transactions and improve their ability to predict market movements.
Right now, investors, miners and traders are hoarding Bitcoin, intending to sell it at the expected peak after the halving. This conduct prepares the market for the expected price drop that occurs right after the halving occurrence. Still, Kalmykov believes that Bitcoin will rebound by year’s end, with a target price of approximately $60,000.
With the 2024 halving approaching, Kalmykov advises investors to be flexible and watchful, ready for a range of situations. Although past patterns suggest room for growth, the market’s complexity currently and the state of the world economy may limit the post-halving boom seen in earlier cycles, he adds.
Kalmykov advises investors to prepare for both the likely market downturn that could occur after the halving and the possible spike in Bitcoin’s value. Still, he maintains his positive view that, as the year goes on, the cryptocurrency community will see a rebound and stabilization in value.
Leading crypto mining companies such as Hive Blockchain Technologies Ltd. (NASDAQ: HIVE) (TSX.V: HIVE) will likely keep a close eye on how the industry reacts to the halving of Bitcoin in order to realign their strategies with any trends that emerge.
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