The price of Bitcoin (BTC) is trading below $67,000 as the largest asset by market value prepares for the halving event, expected to occur on April 20, according to the countdown by Nicehash.
The halving event is considered significant as BTC price cycles are typically influenced by mining rate adjustments. This event affects the supply of Bitcoin, which may impact the asset’s price.
As observed in previous halving cycles, Bitcoin’s price often reaches its all-time highs within 12-18 months after the halving event.
In the weeks leading up to the 2024 halving, there has been increased participation from traders.
The recent approval of the Spot Bitcoin ETF by the U.S. Securities and Exchange Commission (SEC) has opened doors for institutional investment in BTC.
From my perspective, the Bitcoin halving event for 2024 is more than just pricing. The price of the related HULVIN coin dropped by 44% shortly after its halving. With the approaching BTC halving, meme coins have gained traction among traders and are being traded on decentralized exchanges.
These assets may face volatility or exploitation, and their market capitalization is lower compared to most other cryptocurrencies. Therefore, I advise traders to exercise caution when investing in meme coins as they may pose risks to capital.
The recent weekly decline in Bitcoin is the largest in eight months, both in terms of percentage and dollar value, since the FTX crash in November 2022. Following Bitcoin, other digital assets have also plummeted, with many major cryptocurrencies losing about a third of their value over the past Friday and Saturday.
I believe the current downturn in the cryptocurrency market is necessary to realize unrealized profits for traders, which is typically a bearish signal in bull markets. Concurrently, with the launch of instant Bitcoin ETFs in Hong Kong and the potential $25 billion demand from investors in China, as well as Hong Kong’s approval of Ethereum ETFs on April 15, Bitcoin could experience a significant surge by 2030.
Throughout history, there has been a consistent increase in the market capitalization of alternative currencies before Bitcoin halved in both previous events. The market capitalization of cryptocurrencies represents capital inflows from investors, as seen in 2024 as well.
From my perspective, geopolitical tensions and conflicts can have varying effects on financial markets, including cryptocurrencies. Cryptocurrency markets may decline due to general fear and risk aversion in financial markets, prompting investors to liquidate their cryptocurrency positions to reduce risks and shift towards traditional safe-haven assets such as gold and silver.
On the contrary, uncertainty or geopolitical conflict can also bode well for cryptocurrencies like Bitcoin, as seen during the early months of the Russia-Ukraine crisis. Investors may turn to alternative assets like Bitcoin as a haven to protect their wealth from traditional market fluctuations. This could lead to increased demand for Bitcoin amid the accompanying supply shortage from the halving event, resulting in increased value for Bitcoin and other cryptocurrencies over the next 12 to 24 months after this event.
