In simpler terms, after Bitcoin‘s fourth halving, the market conditions have been favorable, indicating that investors expect Bitcoin’s price to increase and miners are adapting accordingly.
Based on Bitfinex’s latest analysis, long-term bitcoin (BTC) sellers haven’t triggered the usual price decline before the halving event. Instead, it appears that new investors are effectively buying up the offered supply.
Miners Adjust Strategies
The process of Bitcoin’s supply being cut in half has increased its scarcity, resulting in a daily circulation of approximately $40-$50 million. Experts predict this amount may decrease to around $30 million daily, considering both active and dormant coins and miner sales. This reduction is expected to intensify as smaller mining operations face the challenge of maintaining profitability and are likely to close down.
Bitcooin miners are presently adapting their methods of operation to cope with the lower rewards for each block they mine and maintain their businesses, which are facing decreased income due to the halvings.
In the past, Bitcoin halvings have seen a typical response from miners who sell heavily to secure profits before expected decreases in earnings. This tactic, designed to enhance gains amidst shrinking rewards, may temporarily harm the market, causing heightened volatility and price drops. (Analysts’ statement paraphrased)
Miners seem to have sold their Bitcoins prior to the halving event, causing a noticeable decrease in the number of Bitcoins transferred to exchanges. This could indicate that miners are adopting a proactive approach by selling or using their Bitcoins as collateral to improve their mining operations.
Bitfinex explained that miners’ actions, which prevented a significant market disruption during the Bitcoin halving, were beneficial in the short term. This strategy dispersed potential selling pressure from these mining entities over a longer timeframe instead of concentrating it at a specific point.
BTC to Surge on ETF Demand
Bitfinex experts noted that the way crypto markets behave has changed compared to past bitcoin halvings, which could lessen the impact of new bitcoin supply on prices. They linked this change to increasing demand and widespread adoption of Bitcoin ETFs in the market.
Bitcoin Exchange-Traded Funds (ETFs) that focus on spot bitcoin are predicted to significantly impact market fluctuations because they can draw substantial investments and lead to withdrawals. The concurrent limited supply caused by the halving process and robust demand for these ETFs may push the value of Bitcoin upwards.
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2024-04-23 13:30