The fourth Bitcoin halving is approaching, and there is certainly no shortage of important news regarding its price performance in the markets.
The weekend was definitely turbulent, even though the triggering cause was external to the crypto world.
Summary
The news on Bitcoin price just before the halving
On Friday, before the opening of the US stock exchanges, the price of Bitcoin was still around $70,000.
However, European markets had already started to crack in the second part of the trading session, and with the opening of US markets in decline, BTC also began to fall.
However, Friday’s decline had relied on what seemed to be a good support, namely the $66,000, although for a very brief moment it had almost touched the $65,000.
Once the bags were closed for the weekend, it seemed like the crypto markets could take a breather, but instead a real mini-crash was triggered.
On Saturday, late in the day, news of Iran’s missile attack on Israel was known, and with the stock exchanges closed the negative effect was felt especially on the crypto markets.
The price of Bitcoin has plummeted in just a few hours to below $62,000, a level not seen since March 20, almost a month ago.
However, it immediately experienced a first rebound, bringing it back to at least $63,000.
However, tonight there was a strong reaction, probably due to the news coming from Hong Kong, and the price first went back to $65,000 and then even above $66,000.
Currently it has recovered all the losses from Saturday and Sunday, also bringing itself back above Friday’s lows.
The good news from Hong Kong
The news had actually been anticipated a few days ago, but tonight it became official: the SFC (Securities and Futures Commission) of Hong Kong has approved spot ETFs on Bitcoin and Ethereum.
This means that as many as three new ETFs on BTC and ETH spot should debut soon on the Hong Kong stock exchange.
What is not yet clear, however, is the effect that these ETFs could have on the price of Bitcoin.
Indeed, it is not yet clear whether all Chinese investors will have access to these new products, or only those residing in Hong Kong.
It has been reported that Chinese funds will be prohibited from purchasing shares of the new BTC and ETH ETFs for now, but what really matters is the retail market.
US ETFs have clearly shown that institutional investors, such as large funds, have not yet started to take significant positions in these derivatives, probably because they are waiting for a good time to enter.
The huge success of the new ETFs on Bitcoin spot in the USA is mainly due to retail investors, but the same may not apply to Hong Kong’s TFs if Chinese residents in mainland are prohibited from buying their shares.
Hong Kong is Chinese territory in all respects, but it is an autonomous territory with laws that are sometimes different from those of mainland China.
Only if Chinese residents in mainland China are also allowed to invest in these ETFs, the price of Bitcoin could benefit positively from their entry into the stock market. So it’s no wonder that today’s rise stopped just above $66,000.
The fourth BTC halving
There are now only about 700 blocks left until the next Bitcoin halving.
The halving will occur exactly at block number 840,000, and at this moment the BTC blockchain has reached block number 839,296.
At a rate of about one block every 9 and a half minutes, it will take less than 5 days before block number 840,000 is mined.
So it can be predicted that the halving should arrive more or less during the night between Friday 19 and Saturday 20 April.
This is the fourth halving in Bitcoin’s history, and it will consist of halving the BTC awarded to those who successfully mine a block.
The important thing is that this reward consists of BTC created out of thin air, and this is the only existing and possible form of creating new BTC. So the halving is a monetary policy measure of Bitcoin, and in fact, it is also the only one.
Since miners who receive this reward tend to sell the BTC they receive to cover the high expenses of their hash extraction and block validation activities, a reduction in the reward should lead to a decrease in the supply of BTC on the market.
This has already happened in all three previous cases (2012, 2016, and 2020), not surprisingly all followed the following year by a major bull run.
But this time it’s different, because the bullrun started even before the halving occurred. Moreover, it will be a cut of 450 BTC per day, which is half of that of 2020 and a quarter of that of 2016.
In addition, it should be added that new historical highs have already been recorded last month, so it is not at all possible to exclude even a decrease in the price of BTC after the halving.
Moreover, the macro conditions seem to suggest a possible correction, and when the wait for the halving is over, there could also be conditions for a correction in the crypto markets.
