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The next halving event is just two weeks away, or about 2,000 blocks away, according to The Block’s. Bitcoin Halving Countdown Page.
The estimated countdown is based on Bitcoin’s average block generation time of 10 minutes, setting a potential date of April 20 around 1 p.m. ET, as things stand. Bitcoin’s upcoming halving event will see the reward for network miners increase from 6.25 BTC to 3.125 BTC per block.
Bitcoin halvings are scheduled to occur automatically every 210,000 blocks, or approximately every four years. Once a halving event occurs, miners receive 50% fewer bitcoins as reward for each block of transactions they mine and add to the blockchain. However, they continue to collect additional transaction fees for each block mined as usual.
There have been three halving events in Bitcoin’s history, reducing the inflation of its block reward from 50 BTC to 25 BTC in 2012, then to 12.5 BTC in 2016 and 6.25 BTC during the last halving on May 11, 2020. In the long term, there will only ever be 21 million bitcoins in existence.
Halving events will continue until the last bitcoin is mined around 2140. After that, miners will only earn transaction fees.
Bitcoin Halving Could Be “Priced In”
Historically, Bitcoin halvings have been associated with significant fluctuations in the price of the cryptocurrency. Although not a direct cause-and-effect relationship, these events often preceded large rallies in the bitcoin market.
The question of whether the Bitcoin halving is “built in” is asked every time the event occurs. However, there is one data point that makes the case for “taking into account” this time around.
“This is the first halving cycle in which bitcoin has broken its pre-halving all-time high, which could mean the effect has already been priced in by savvy traders,” they said. said Coinbase analysts David Duong and David Han in a note sent to The. Block this week.
However, analysts added that there is still a collective belief that the halving could drive up prices, “which could lead to behavior leading to a rally.”
The Impact of New Spot Bitcoin ETFs in the United States
This time around, Bitcoin is closer to an all-time high compared to previous halving events. “However, the approval of spot ETFs contributed to a significant change in the supply-demand dynamics of BTC, which could impact prices during and after the halving,” Kaiko said. note earlier this week.
Distance from previous all-time highs. Picture: Kaiko.
“ETFs saw strong overall inflows, which could suggest an immediate positive impact on prices as supply continues to fall,” Kaiko analysts added. “However, ETFs can also experience rapid capital outflows, exacerbating the selling pressure of the underlying asset during periods of market stress. So far we’ve only seen one week of net outflows, but that could change.
Coinbase analyst David Duong agreed that bitcoin’s current rally is largely the result of this new phenomenon, against a backdrop of ETF spot inflows and growing institutional interest, which have “irrevocably modified » the bitcoin market. “This means that Bitcoin’s response to the next halving will not necessarily reflect its performance in previous cycles,” he added.
Although outflows from Grayscale’s higher-fee converted GBTC fund appear to be slowing, so have overall flows from spot Bitcoin ETFs since peaking at a daily net inflow of $1.05 billion on March 12, as Bitcoin neared its latest all-time high. a maximum of $73,836, according to The Block’s data dashboard.
March was also a record month for spot Bitcoin ETFs in terms of trading volume, nearly tripling February’s total to $111 billion. However, after hitting a record high of $9.9 billion on March 5, as bitcoin surpassed its previous cycle high of around $69,000 for the first time, daily volume declined, paralleling the recent decline of the price of bitcoin.
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