Is Another Bitcoin Boom on the Horizon After the Halving?

bitcoin, cryptocurrency, money-8575764.jpg

The bitcoin halving is coming up, and historically, it’s been followed by a significant surge.

Every 210,000 blocks, the reward for miners gets cut in half, which happens approximately every four years. The exact timing of the halving depends on how fast new blocks are discovered. Tracking a bitcoin halving countdown clock gives us a better estimate. Currently, it’s anticipated to occur on April 20 in the early morning.

What to Expect?

Many in the Bitcoin community are expecting another major surge in prices after the halving. The reasoning is simple: with the daily supply of new bitcoins halved, prices should rise assuming demand remains steady. However, investment powerhouse Goldman Sachs is cautioning its clients that this time could be different due to changes in the macroeconomic landscape.

Goldman Sachs points out that while the halving played a role in past bull runs, it wasn’t the sole factor. The broader economic context also mattered. In previous cycles, central banks kept interest rates low, inflation was subdued, and there was a flood of money entering markets through bond purchases. This abundance of liquidity flowed into tech stocks and cryptocurrencies, seeking higher returns.

Today, the situation has shifted dramatically. We’ve experienced bouts of high inflation, which central banks are still grappling with. Quantitative easing programs have been scaled back or halted altogether, reducing the flow of fresh money into markets. Additionally, higher interest rates have made traditionally low-risk investments like government bonds more attractive.

Furthermore, the price of bitcoin has already seen significant increases leading up to the halving, largely driven by inflows into American ETFs (Exchange-Traded Funds). Whether demand for these ETFs will remain strong is uncertain.

In conclusion, while the bitcoin halving historically sparked bullish trends, the current economic environment introduces new variables. Whether another bitcoin boom is on the horizon remains to be seen.

For more information on purchasing cryptocurrencies, you can check out our bitcoin guide here.

Trading in futures, options, forex, CFDs, stocks, cryptocurrencies, and similar financial instruments carries significant risk and is not suitable for everyone. Before trading, carefully assess whether it aligns with your experience, financial situation, investment goals, and risk tolerance.

The content on FinanceFacts is for informational purposes only and should not be considered investment advice or a recommendation to trade. We do not guarantee the accuracy or completeness of any information provided. Any decisions you make based on our articles are entirely your own.

FinanceFacts is not responsible for any losses that may result, directly or indirectly, from using or relying on the opinions, news, analyses, prices, or other information presented on this website. Always do your own research and consult a qualified financial professional before making investment decisions.

Advertising
Advertising