Is it a good time to invest in cryptocurrencies with the halving event approaching?

Cryptocurrencies spent the past year bouncing from the 2022 bear market and continued to rise as we delved deeper into 2024. During the month of February, Bitcoin stunned investors by rising beyond the $60,000 mark, and at the beginning of March it recorded new record highs approaching the $75,000 level. Dollar, experts have given reason to believe in further growth this year is the upcoming halving event.

Prices have doubled Bitcoin trading three times since January 2023, and much of the recent gains are due to hype around two long-awaited events in 2024: the approval of 11 bitcoin exchange-traded funds by the US Securities and Exchange Commission in January that led to billions of dollars in inflows, one month later. Only after this news spread did Bitcoin surpass $50,000, a value the asset has not seen since 2021.

The next event scheduled for next April will slow the production of new Bitcoin, which could ostensibly push the asset's price higher. Here's what cryptocurrency investors need to know about the upcoming Bitcoin halving.

What is a Bitcoin halving?

Bitcoin halvings are an event that occurs approximately every four years since the cryptocurrency emerged in 2009. Halving dates will not directly affect Bitcoin holders, but they do include actions that could bode well for the future value of the asset.

In short, the halving event relates to Bitcoin mining, which is the process through which transactions on the blockchain are verified and new Bitcoins are introduced into circulation, through miners who have computers that create Bitcoin by solving complex mathematical equations. When a computer... By solving a problem, the network rewards the miner with newly minted Bitcoin, thus increasing the total number of coins in circulation.

However, there are a limited number of Bitcoins that can be mined throughout its history (21 million to be exact). There are currently about 19.6 million of them in circulation, of which only 1.4 million have been mined yet. When the halving event occurs, the Bitcoin protocol halves... The number of coins awarded to successful miners has been halved. Since 2020, miners have received 6.25 Bitcoins for solving a problem. When the next halving occurs, miners will receive only 3,125 Bitcoins.

The result is that after each halving, the computing power needed to create a new Bitcoin doubles. In theory, a sharp decline in production will cause the value of the asset to rise, given that demand for the asset remains constant or grows.

When is the next Bitcoin halving?

One of the unique features of the Bitcoin halving process is that although it occurs approximately every four years, there is no set date for the next halving. Rather, it occurs after 210,000 blocks on the Bitcoin chain have been filled with data, whereas it takes about four years to complete this amount of mining. Years, but it is not possible to accurately predict the exact day of its occurrence. However, experts estimate that the next halving will occur in mid-to-late April 2024, that is, about less than a month from now.

These halving events will continue approximately every four years until the 21 million bitcoins that make up the total supply are mined, and estimates suggest it will take until 2140 for that to happen.

Is now a good time to buy Bitcoin?

As Bitcoin approaches the halving event, is now the time to invest in Bitcoin? Previous halvings have set a precedent for price increases and in the months following each of the past three halvings, the most recent halving which occurred in May 2020 saw the value of the cryptocurrency rise. By $2,000. However, the reasons why Bitcoin prices rise or fall are complex and not always logical. Throughout that year, the currency rose dramatically from about $7,194 to $32,810 due to little news.

Experts are largely optimistic this year towards cryptocurrencies in the context of Bitcoin ETFs and the halving event.

Bitcoin trading price 73000Dollar in March 2024

Bitcoin fell significantly due to uncertainty fueled by interest rate hikes by the US Federal Reserve after Covid-19, and only recovered in 2023 as the monetary policy stance stabilized towards a pause, and 2024 has been a great year for Bitcoin so far with a sudden rise. Prices reached new record levels.

In the past month, Bitcoin has risen by approximately 51.09% to reach the $50,000 level in mid-February. As of March 18, Bitcoin is trading at $67,858 with a market cap of $1.33 trillion.

The main reason for the rise in Bitcoin prices is strong inflows to ETFs For spot Bitcoin, which was only recently approved by the SEC, as of February 29, 2024, spot Bitcoin exchange-traded funds saw a total daily net inflow of approximately $678.67 million with Blackrock, Fidelity, and Grayscale contributing significantly to the volumes of these funds.

According to the data, business intelligence firm MicroStrategy has significantly expanded its digital asset portfolio beyond BlackRock. MicroStrategy currently holds 205,000 BTC worth approximately $821.7 million while BlackRock currently holds 197,943 BTC.

Experts believe that the upcoming Bitcoin halving event in April has also increased market sentiment towards Bitcoin reaching new heights. Market participants expect Bitcoin to surpass all previous highs and make a notable jump to set new records.

What lies ahead for Bitcoin?

While the future of Bitcoin is still unclear, individual investors can take advantage of the current situation by diversifying their portfolios. At the same time, investors need to be careful as upcoming events could lead to extreme fluctuations in Bitcoin prices which could fluctuate. In any direction.

When analyzing whether investors should invest their hard-earned money in Bitcoin, it is important to note that although the value of Bitcoin is rising, it may continue to collapse as it has in the past. As Bitcoin approaches the halving event, it is likely to exceed The coin will soon reach $75,000 and set a new record high, but with unexpected fluctuations and as history sees the value of Bitcoin fall by more than a third, only time can tell if this current rise is a bullish rise or a bullish trap.

Khaled Taha

A tech writer, technology enthusiast, and a good follower of what's new in the smartphone world. I have been working in the field of electronic journalism since 2013 and until now, I have worked in many technical sites and I am currently working on the website (Review Plus).
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