How will Bitcoin market trend after the fourth halving?

On April 20, Beijing time, the only true god of cryptocurrency, Bitcoin, ushered in the fourth halving in history. Looking back at the previous halvings, the maximum increase of BTC in the first halving was 2300%, the second halving was 4158%, and the third halving was 741%. The block reward of this halving also decreased from 6.25 bitcoins to 3.125 bitcoins, and the most direct impact was the reduction of miners' income.

From the above cycle, BTC prices have risen sharply after halving and have repeatedly hit record highs. This rule also makes the crypto market expect BTC to achieve greater success. However, for this halving, the market views are divided, with both long and short positions. In addition, BTC prices have retreated to varying degrees after halving in the past, with the maximum being 40%.

As for how the future market of Bitcoin will develop, and whether it will reach $100,000 as predicted by institutions? Coincidentally, Goldman Sachs, Glassnode, Coinbase, etc. all said that the approval of the US Bitcoin spot ETF has made this round of halving different, so it is necessary to pay close attention to the trend of ETFs. Recently, the news that the Hong Kong Bitcoin and Ethereum spot ETFs will be approved at the end of April is also continuing to ferment.

1. Bullish and bearish views, each with its own opinion

The fourth halving is also the most popular one in history. According to Google Trends data, the search popularity of the keyword "Bitcoin Halving" on Google is constantly setting new historical highs.

Since the approval of the US Bitcoin spot ETF, the types, scope and levels of BTC investors have become more complex and diverse than before. With the Bitcoin halving, investors are most concerned about what the future market trend will be.

Multiple parties:

Long before the halving, many institutions gave BTC price predictions. Crypto research institutions PlanB and Glassnode both predicted that the BTC price will rise and exceed $100,000 in 2024. Pantera Capital more specifically predicted that after the entire bull market cycle is over, the BTC price will reach about $149,000 in 2025.

Other organizations or individuals have the following opinions:

CZ : Based on the experience of the past three halving events, the price will not double overnight after the halving. However, within a year after the halving, the BTC price will hit a record high many times.

Bernstein analyst: Bitcoin's bullish trajectory will resume after the halving and will rise to $150,000 by the end of 2025.

Zhu Su: Structurally, April is bullish and we are still in the early stages.

Coinbase : Bitcoin halving may have a positive impact on prices, but there is still some speculation.

Anthony Scaramucci, founder of Skybridge Capital: Based on historical data, the price of Bitcoin is expected to reach $170,000 after the halving. Anthony Scaramucci also predicted that in the long run, the price of Bitcoin may reach $400,000, with a possible 10-fold increase in market value, and approaching half of the market value of gold.

According to his experience and analysis, the peak of Bitcoin price will occur about 18 months after the halving event in April. He predicts that the "cycle top" of Bitcoin price may be equivalent to four times the price at the time of halving.

David Bailey, chief marketing officer of Azteco: The halving is essentially a change in the compensation for people who process Bitcoin transactions, reminding people that Bitcoin has a limited supply and increased demand may drive its value up.

On the whole, many parties generally predict that Bitcoin will reach its peak next year, and may reach a maximum of around US$150,000.

Short side:

JP Morgan analysts: BTC is currently in an overbought phase, and the price may not rise after the Bitcoin halving. At the same time, analysts believe that the lack of venture capital funds in the encryption field will also lead to a decline in the value of Bitcoin.

On March 20, the bank issued a report saying that Bitcoin could fall to $42,000 after halving.

Crypto.com CEO: There may be a significant sell-off during the Bitcoin halving, but in the long run, this event will support the price of BTC.

10x Research: In the past few months, miners have been accumulating BTC inventory, which has led to an imbalance between supply and demand and has driven up the price of Bitcoin. However, after the Bitcoin halving, miners may sell $5 billion of BTC. During the downturn in Bitcoin's trend, the altcoin market may be the first to bear the brunt and face greater downside risks.

CryptoQuant: The Bitcoin halving effect may not be as expected, as the number of newly issued Bitcoins is less and less than the number of Bitcoins sold by long-term holders, and the growth of investor demand is the key driving force.

Judging from the voices of the bears, JPMorgan Chase is clearly the biggest predictor of Bitcoin's downward trend after halving, and the bank has issued similar bearish views many times.

Holding Square:

Most of these institutions believe that this halving will not be enough to cause fluctuations in the Bitcoin market, but there are also views that it will have a significant impact, but they have not clearly expressed their views on whether it will rise or fall.

Deutsche Bank: Bitcoin halving has been partially priced in, and a sharp rebound may be unlikely in the future.

CryptoQuant: The Bitcoin halving effect may not be as expected. Rather than the impact of halving, the increased demand from BTC investors holding a large amount of Bitcoin is the key driver of BTC prices. The current supply-demand gap is larger than ever before, indicating that even with halving, the impact on Bitcoin prices may not be as significant as in the past.

DWF Lianchuang: The total market value of the crypto market is rising, but the spot trading volume has dropped significantly. The halving of Bitcoin may bring huge fluctuations to the market.

Bitwise CEO: The Bitcoin halving in April this year may be the most influential in history.

Marathon CEO: The approval of the ETF has pushed forward the Bitcoin "halving trend" ahead of schedule, and this halving will have little impact on the currency price.

Bitwise: Based on historical data, the market tends to underestimate the long-term impact of Bitcoin halving.

2. Direct impact of halving: miners

Bitwise: Based on historical data, the market tends to underestimate the long-term impact of Bitcoin halving.

Core Scientific CEO: Bitcoin's "halving" will put some mining companies in trouble and make them unable to undertake some existing orders. For this reason, the company may acquire these mining machines.

Bloomberg : This Bitcoin halving will reduce by half the number of Bitcoins that miners can earn by verifying transactions every day, which will have an impact of about tens of billions of dollars on cryptocurrency miners. In addition, the increasing competition among artificial intelligence companies for preferential electricity rates will also lead to a decline in the income of Bitcoin mining companies after the cost surge.

Hut 8 CEO: Halving will have a "different scale" impact on the crypto mining industry, and large mining companies must become low-cost operators in order to survive after the Bitcoin halving.

hashrateindex.com reports: After the Bitcoin halving, old mining machines may be retired and the estimated computing power will be reduced by 100 EH/s.

Fidelity : Bitcoin halving is coming, miners need to be prepared. While Bitcoin holders generally expect the four-year reward halving to push up prices, miners must actively develop strategies and plan for the upcoming event to prevent bankruptcy. The report emphasizes that if miners want to be profitable, they must be proactive and not just maintain their position in the network.

Analyst Daniel Gray said that miners must maintain current computing power, energy consumption and infrastructure and face constant competition from the entire network, all of which are striving to maintain profitability amid the same challenges. Gray emphasized that miners must constantly strive to improve computing power efficiency, obtain lower-cost energy from more economical sources, and expand infrastructure to accommodate new machines. However, given the competitive landscape, every miner is competing for the same resources.

Cantor Fitzgerald report: The upcoming Bitcoin halving event will bring major challenges to the Bitcoin mining industry. BitDeer has the lowest mining costs in the industry and may be the biggest beneficiary of Bitcoin halving.

CoinShares : After the Bitcoin halving, the price needs to remain above $40,000 for most miners to be profitable.

The 2023 mining report released by CoinShares shows that Bitcoin mining computing power has increased by 104% , raising questions about its environmental sustainability and profitability, especially the efficiency and energy costs of the network; the average production cost of each Bitcoin is expected to be US$37,856 after the halving.

Most miners will be challenged by the cost of sales and administrative expenses and will need to reduce costs to remain profitable. Unless the Bitcoin price remains above $40,000, only Bitfarms, Iris, CleanSpark, TeraWulf and Cormint will be able to continue to be profitable.

Market analysts: Bitcoin halving will trigger a battle between mining companies to expand computing power and acquire other companies. To cope with this event, large companies are buying newer and more efficient mining machines. But they may also consider acquiring smaller miners because mining companies are looking for ways to benefit from the halving while ensuring their survival.

However, there are also reports that the top five Bitcoin mining companies did not sell Bitcoin due to the halving. According to a report by Bitwise on April 10, in the first quarter of 2024, the total amount of Bitcoin sold by the top five mining companies fell to about 2,000 , reaching the lowest level in two years.

Currently, Bitcoin miners around the world hold more than 700,000 Bitcoins , accounting for 3.4% of the total Bitcoin supply. The last time the top five mining companies sold less than 2,000 Bitcoins was in the first quarter of 2022. In contrast, in the fourth quarter of 2023, the top five mining companies sold more than 7,000 Bitcoins in total.

Among the top five mining companies, Marathon Digital produced the most Bitcoin, with a cost price of $22,249 per coin. It produced more than 2,500 Bitcoins in the first quarter of 2024, but this figure was lower than the more than 4,000 Bitcoins in the fourth quarter of 2023.

JPMorgan Chase: The reduction in halving rewards will have a negative impact on miners' profitability and lead to higher Bitcoin production costs. Analysts further stated that the Bitcoin mining industry may further consolidate and larger miners will survive.

Summarize

Judging from the current views of both bulls and bears, the mainstream voice in the crypto market is still bullish. From the market news, mining companies have not chosen to sell a large number of Bitcoins due to the halving, and the BTC price has remained in the range of about US$59,600-73,800, without an exaggerated correction, but the altcoins have fallen sharply.

As for the biggest factor affecting the future market of Bitcoin, many institutions including Goldman Sachs, Glassnode, and Coinbase believe that the US Bitcoin spot ETF has changed the comparison between the supply and demand of BTC. Therefore, investors should focus on the important dynamics of ETFs. The rumor that the Hong Kong Bitcoin spot ETF will be approved at the end of April will be a big positive for BTC.

As for the positive sectors of this halving, some institutions said that halving will be conducive to the adoption of second layers such as the Lightning Network; DWF Venture said that halving may increase the transaction volume of Ordinals exponentially, and may also create a wealth effect for the Runes ecosystem. And the new CEO of Binance also said that in order to welcome the halving, Binance has adjusted its series of products and services related to the inscription market.