Is Bitcoin halving period a good time to invest in the crypto asset?

bitcoin Historically, halving events have provided global investors with successive bullish momentum that has often resulted in all-time highs. As Bitcoin's 2024 halving event approaches on April 19, questions have been raised as to whether the market will repeat itself once again or not. Investors are eagerly awaiting the right time to invest in the world's largest bank. cryptocurrencywith lingering doubts about whether it would be the right time to invest.

bitcoin price The action history suggests that, similar to past halving events, the April 19 halving event could provide an opportunity for investors to invest their capital in cryptocurrency. He showed a strong rise from $42,000 at the beginning of the year to $72,000 on March 12 to set a new all-time high level. The development came just a week after surpassing the 2021 all-time high of $68,729. During this time, the US Federal Reserve maintained interest rates. However, rates are expected to be drastically reduced in the final months of 2024.

The price action of the world's largest cryptocurrency could also be influenced by dynamic and unknown macroeconomic conditions. In 2024, more than half of the world's population will vote to select their respective governments. While this may be one of the aspects influencing the price of BTC, two main factors will influence the volatility more. One of these factors will be the approval of 11 Bitcoin spot ETFs after a long delay, while the other is the timing of the ETF's arrival, just before the BTC halving event. First, the approval has helped establish Bitcoin as a trusted global asset class. The approved ETFs accumulate 30% of the total capital inflow of the cryptocurrency until March 13: a value of more than 2 billion dollars. As for the second, the halving event will decrease the global supply of Bitcoin, causing a reduction in mining yields from 900 to almost half of previous levels. While halving events have a positive effect on the cryptocurrency's price action, the upcoming event is projected to be additionally pivotal in the history of the virtual digital asset.

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Furthermore, reduced supply becomes a driver of price increases, especially during breakouts following the three-part halving event: breakout, distribution, and accumulation. When supply is lacking but demand persists, the price tends to rise as existing Bitcoins become expensive. On the other hand, the lack of supply also puts a spotlight on Bitcoin and the asset class in general, resulting in more capital inflows. Experts suggest that these cycles set aspirations for investors that function as a positive feedback loop; However, the ROI may not match past all-time highs primarily due to VDA's larger market capitalization. However, investors should consider the fact that the halving event in April 2024 will see significant participation from institutionalized investors and ETF capital.While Bitcoin has been widely known for its rapidly changing market dynamics for a long time, this paradigm shift could lead to new behavior on the part of the cryptocurrency and contribute to a new level of complexity and additional demand. Some analysts project that while Bitcoin halving events have led the cryptocurrency to set new all-time highs, the scenario could be different this year. These projections are based on the continued outflow of capital from gold and other valuable commodities that are being invested in Bitcoin ETFs at an unprecedented rate. This means that recognition of Bitcoin as an asset class has improved, leading more retail investors to purchase the cryptocurrency, although there is a shortage of availability. There have been predictions that this has resulted in Bitcoin reaching all-time high levels before the halving event, unlike previous events where it happened later. If the prediction comes true, it will mean that the entry stage has already been passed and for retail investors there will be no significant profit in the future. However, there are also different opinions. Some experts believe that Bitcoin remains undervalued at the moment and will soon cross the $100,000 level, creating a new all-time high after the halving event. These predictions also say that to reach this record level, there will be considerable volatility, but investors should not lose patience. This says a lot about the impact of the halving event in 2024, all of which currently depends on particular aspects. (The author is Co-Founder and CEO of GoSats) (Disclaimer: The recommendations, suggestions, views and opinions provided by the experts are their own. These do not represent the views of the Economic Times)

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