The market is a mirror of many factors: however, there are a few that have sharply affected the price of cryptocurrencies over time, and one of them is the Bitcoin halving.
In the past, Bitcoin’s halving has always affected the market in a positive way.
Therefore, investors are eagerly waiting for the event that could mark the end of this bearish market, kicking off the long-awaited bull market. The next halving is expected roughly around 2024.
What is Bitcoin halving? And why is it so important?
What is this event that could change the course of the market and probably open the next bull market cycle? We must first make a preamble.
As is now well known, the number of Bitcoin that can be mined is limited. In fact, the maximum number of Bitcoin in circulation can never exceed a quota of 21 million. Once the quota is reached, the production, i.e., mining, will cease.
For those who do not know, miners, the people who mine Bitcoin, are rewarded with the coin itself.
The purpose of the halving is to reduce the “production rates” of mining, through the halving of the reward that is awarded to the miners. As a result of this, the number of Bitcoin issued in the market halves, and usually the value of Bitcoin tends to increase.
What by definition is simply a halving of the reward is one of the main factors that has driven Bitcoin so high so far.
Currently, about 900 BTC are created every day, but with the new halving scheduled for 2024, the manufacturing process will make only 450 BTC mineable per day.
Why does it drive up the price of Bitcoin?
Subsequent to the halving of the rewards, the supply of Bitcoin undergoes a major downsizing and thus goes to affect all the dynamics within the price formation. The push in the supply side tends to decrease stimulating a greater demand of the demand side, and therefore a rise in price.
So for this to happen, to make the price of Bitcoin go up, the demand for Bitcoin must go up, or at least remain constant.
In conclusion, the halving process will not give us certainty that the price of Bitcoin will go up. Without a strong push in the demand side, there will be no end to the bear market and the beginning of the much hoped-for bullish market.
The $100k prediction after the fourth halving
Making predictions about the price of Bitcoin is a favorite sport for investors. The $100,000 mark for Bitcoin is the missing milestone in demonstrating the asset’s power.
Among the many predictions that have been made, regarding Bitcoin, the one most related to the halving process came from Morgan Greek CEO.
Mark W. Yusko, CEO of Morgan Creek, a company specializing in investment and asset management, predicted that Bitcoin will exceed $100k subsequent to the next halving. Certainly one cannot say that the predictions of the CEO of Morgan Greek, are always true or at least not very outlandish.
This prediction seems to have been the one most quoted on Twitter as well. The $100,000 by 2024, does not seem an unattainable goal.
In the event that the halving of 2024 is repeated in the same way as previous ones, Bitcoin could hit its all-time highs. Anyone knows that the most famous cryptocurrency in history is a trend dragger, and with it most likely the whole market will recover.
Regardless of Bitcoin reaching $100,000, the cryptocurrency industry is here to stay and there are many other solutions besides BTC for secure digital payments.
During these testing times, the future looks bright for digital assets.