CoinEx Analysts Evaluate Bitcoin Halvings Impact on Price and Macro Environment
Date: 2024-03-03 Author: Dima Zakharov Categories: BUSINESS
Understanding Bitcoin Halvings and Their Significance
Bitcoin halving stands as a pivotal feature of the Bitcoin protocol. To grasp its essence, one must rewind to the inception of Bitcoin.
Bitcoin, introduced by Satoshi Nakamoto in 2008 and launched in 2009, was conceived as a currency independent of traditional financial systems, with a maximum supply of 21 million coins.
Bitcoin is mined, a process involving the validation and recording of transactions on the blockchain, with miners receiving new bitcoins as rewards.
Roughly every 4 years, or every 210,000 blocks, Bitcoin undergoes a halving, reducing the reward for mining a new block by half (the current block reward stands at 6.25 bitcoins). This process also diminishes the rate of new bitcoin issuance, with issuance expected to cease entirely by 2140.
To date, three halvings have occurred, with the fourth expected on April 19, 2024. Past halvings occurred on January 28, 2012, July 9, 2016, and May 11, 2020.
Market Impact and Future Implications
These events attract market attention and can positively influence Bitcoin's price in the short term, although their long-term consequences hinge on various factors, including market demand and macroeconomic conditions.
CoinEx researchers provide insights into the impact of Bitcoin halving on the cryptocurrency market and its relationship with the global financial market, while also evaluating Bitcoin's potential and risks as a growing asset class.
Varied Impact on Investors, Traders, and Miners
Analyzing indicators before and after previous halvings reveals trends. Although Bitcoin reached record highs after each halving, achieving historic highs requires more time with each occurrence, with multiples below.
Wallet Balances and Trading Volume Changes
The number of wallets with non-zero balances surpassed 50 million, with wallets holding more than 1 bitcoin exceeding 1 million. These wallet types reflect cryptocurrency distribution considering halvings.
However, the number of whale wallets (with balances exceeding 100 or 1000 bitcoins) has decreased since the last halving.
Traders' Perspectives: Changes in Bitcoin Spot Trading Volume
The average daily spot trading volume over the past week stood at approximately $25 billion, still significantly lower than the previous bull market. As spot trading volume gradually increases compared to the last bear market, Bitcoin's price remains not far from its last historical high.
A V-shaped pattern in price movement and trading volume is gradually forming. It is expected that trading activity will rise amid the approaching halving and the increasing popularity of cryptocurrencies.
