Bitcoin: Will the upcoming halving change BTC’s fortunes?

  • Grayscale’s data suggested a positive outlook towards Bitcoin as the halving approaches.
  • Bitcoin ETFs and on-chain activity could offset potential post-halving volatility.

Bitcoin [BTC] has seen a massive rally over the last few days, inspiring optimism from holders and traders alike. However, there were some concerns about the upcoming halving and the impact it could have on BTC.

No need to worry?

However, Grayscale Investments recently released data suggesting that things could turn out well for BTC.

According to their released data, Bitcoin’s halving is set to take place around April 2024.

While acknowledging short-term challenges for miners in terms of revenue, Grayscale emphasized the positive fundamental changes surrounding this halving.

According to their data, miners have strategically positioned themselves to counter reduced block rewards by securing funds through equity/debt issuances and selling reserves, mitigating potential financial strains.

Despite these factors, traders should account for the possibility that many miners may sell their holdings to maintain profitability, which could cause downward pressure on BTC.

The declining revenues faced by the miners could impact the situation negatively as well.

miners revenue 2


Looking at the ecosystem

Another factor that could offset volatility after the halving could be the rising interest in Bitcoin’s ecosystem.

Recently, there was a surge in on-chain activity on the Bitcoin network, particularly with the advent of ordinal inscriptions.

The inscriptions have led to over 59 million Non-Fungible-Token [NFT] collectibles, and have injected vitality into BTC’s ecosystem.

This has resulted in significant transaction fees, exceeding $200 million as of February 2024.

The sustained on-chain activity growth trend is expected to continue, fueled by ongoing innovations and renewed developer interest in the Bitcoin blockchain.

The surge in activity and the subsequent fees generated on the Bitcoin network could also help offset the selling pressure that the Bitcoin miners might face in the future.

Screenshot 2024 02 12 at 2.02.42 PM

Source: Glassnode

The continued adoption of Bitcoin ETFs could help absorb sell pressure and reshape Bitcoin’s market structure by introducing a steady demand, ultimately favoring price dynamics.

At press time, BTC was trading at $48,204.27. Its price had surged by 0.17% in the last 24 hours.

Read Bitcoin’s [BTC] Price Prediction 2024-25

The velocity at which BTC was trading during this period had also declined, indicating that the frequency at which BTC was being traded had fallen.

Only time will tell how the addresses will behave post-halving.

Bitcoin BTC 14.15.14 12 Feb 2024

Source: Santiment

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