According to the cryptocurrency analysis platform, CryptoQuant, the influence of Bitcoin‘s halving events on its value seems to be decreasing. Therefore, they predict that the forthcoming halving may have a relatively minor effect on Bitcoin’s price.
In the most recent installment of the company’s crypto analysis, it was noted by experts that the impact of Bitcoin’s halving has diminished due to the decreasing amount of new Bitcoins being released in comparison to the larger volume of Bitcoins held long-term and offered for sale. This implies that the price of Bitcoin following the halving will be influenced significantly by demand.
Bitcoin Halving Effect on a Decline
The report indicates that the monthly release of new Bitcoins has decreased to just 4% of the existing Bitcoin supply. Prior to the first, second, and third halving occurrences, Bitcoin issuance accounted for 69%, 27%, and 10% of the total Bitcoin supply respectively. In the previous year, an average of 28,000 new Bitcoins were generated monthly, while long-term holders sold off approximately 417,000 Bitcoins during the same period.
For the first time ever, the need for Bitcoins from long-term holders has exceeded the monthly issuance. Approximately 200,000 new Bitcoins are being added to their stashes each month by this group of investors, while only 28,000 new Bitcoins are being released.
Long-term Bitcoin holders tend to spend less during market downturns and more when prices are high. This pattern aligns with the price cycle, as Bitcoin’s value typically bottoms out when long-term holder spending is low and peaks when it’s significantly higher than usual compared to the total supply. At present, long-term holders are currently spending less.
Following the Bitcoin halving on April 20th, the number of new coins released every month is expected to decrease to around 14,000. Consequently, the expansion in market demand could push Bitcoin prices upward.
The Impact of Large BTC Holders
Previously, large investors and cryptocurrency whales drove significant increases in Bitcoin demand following each halving event, leading to strong price rallies. Currently, with monthly demand growth at approximately 11%, which is the highest on record, it’s clear that this trend has been the major cause of Bitcoin’s recent surge in value.
Last month, Bitcoin hit a new record price for the first time prior to its halving event, providing evidence for CryptoQuant’s assertions. This upward trend was fueled by increasing interest in Bitcoin spot exchange-traded funds that became available in January.
Simultaneously, experts predict that older Bitcoin owners, who have held their coins for over five years, may intensify their selling activity following the upcoming halving event.
The report mentioned that the annualized spending rate of OG Holders is approximately 8%, which is significantly higher than the historical average of 1.1%. At the same time, the current issuance, represented by the orange area, amounts to a 1.8% annualized rate. Following this month’s halving event, the issuance rate is expected to decrease to around 0.8% per year.
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2024-04-13 14:34