Since the Bitcoin network completed its fourth halving on Friday evening, the price of the cryptocurrency has risen only slightly as the reward for miners adding a new block to the blockchain was reduced to 3.125 from 6.25. Historically, a halving causes prices to rise, but the original cryptocurrency has yet to rise 4% since the event and was trading around $66,500 as of early Tuesday afternoon.
✨ Legends celebrating the 1st #Bitcoin halved when price was $12 in 2012 pic.twitter.com/tkOKCXYDub
— Rizzo (@pete_rizzo_) April 18, 2024
Experts say there are various reasons why Bitcoin’s price has remained fairly stable so far, and hodlers may have to wait to reap the benefits. Luck.
“The halving did not have an immediate impact on the price. The market impact of Friday night’s move from Epoch 4 to Epoch 5 will be felt in the weeks and months ahead,” said Mark Connors, head of research at 3iQ. Luck in the note. He added that the extent of price changes will largely depend on hashrate (the total computing power used to mine Bitcoin).
“Friday night,” Connors added, “was more about watching the expected programmatic shift materialize: did it execute as expected? Now we can check that box.”
Bitcoin is still fluctuating. This is the best case scenario.
Once the halving is behind us, the price will eventually exceed the current ATH.
This will mark the beginning of a new mass rally. Be patient. #BTC pic.twitter.com/MMg38DRQ5Z
— Duo Nine ⚡ YCC (@DU09BTC) April 23, 2024
Another reason why Bitcoin’s price doesn’t fluctuate much in either direction is due to the “buy the rumor, sell the news” investors pushing prices down, which may be why Bitcoin dropped 12% two weeks before the squeeze. doubled. The retreat was somewhat expected, Vetle Lunde, senior analyst at K33 Research, previously said. Luck, because the halving has been widely documented and was intended by the Bitcoin algorithm. Historically, the best day to sell Bitcoin was 500 days after the halving, as Markus Thielen, founder and head of 10x Research, previously said. Luck.
Cryptocurrency stock prices
Meanwhile, Bitcoin-related stocks posted sharp gains. Microstrategy, the largest corporate holder of Bitcoin, was trading around $1,350 at midday Tuesday, up about 15% from Friday. Leading US exchange Coinbase rose about 10% to $235, while shares of bitcoin miners also rose, with Marathon Digital Holdings up 15% to $9.28 and Riot Platforms up 25% to $11.70.
Subsequent price increases by major miners indicate market confidence that they will continue to provide sufficient hashrate to power the blockchain despite declining rewards, by introducing more efficient hardware to maintain profitability, Matteo Greco, Research Analyst at Fineqia International. , said Luck in the note.
However, in the first 48 hours after the halving, the network’s hashrate dropped by about 5% as miners either went offline or scaled back operations to avoid losing money.
“The decline in overall hashrate following the halving should not be interpreted as a sign of stress in the mining industry, but rather as a typical reaction to this event. The hashrate is expected to recover over time as miners become more efficient and competition intensifies,” Greco said.
As larger miners purchase more efficient machines this year, Thomas Chippas, CEO of Argo Blockchain, expects the overall hashrate to increase as those machines arrive from manufacturers and are connected to the network.
“You will see more hashrates gradually come back online,” Chippas said. Luck. “The unknown factor, of course, is the rate of change in the overall hashrate in the network, the complexity of the change [of production]and then the price of Bitcoin.”