Key Points
- The 2024 Bitcoin halving may have already been factored into the current price, according to Marathon Digital CEO Fred Thiel.
- Increased demand from ‘whales’ and the launch of Bitcoin ETFs could offset the impact of the halving on Bitcoin’s price.
Fred Thiel, CEO of Marathon Digital Holdings, the largest Bitcoin miner in the US, has suggested that the upcoming 2024 Bitcoin halving might already be priced into the current value of the cryptocurrency.
This event, set to take place in late April, is widely expected to push Bitcoin’s price to new record highs. However, Thiel believes that some of this anticipated price increase may have already been accounted for.
Impact of Bitcoin ETFs and Whales’ Activity
Bitcoin’s value has seen a remarkable surge in 2024, with a rise of over 60%. This increase has been largely driven by the successful US launch of Bitcoin exchange-traded funds (ETFs).
Thiel suggests that this increased accessibility to investment has “brought forward” the price appreciation that is typically seen three to six months after a Bitcoin halving event.
The upcoming Bitcoin halving will reduce miners’ block rewards by 50%, essentially halving the amount of Bitcoin earned for validating transactions. This reduction is a significant blow to mining firms like Marathon, as it cuts a crucial source of revenue.
However, this halving also reduces the new Bitcoin supply entering circulation. Historically, this decrease in supply, combined with constant demand, has led to price increases.
Changing Market Dynamics
CryptoQuant, a reputable cryptocurrency analytics firm, offers a different perspective. Their latest report suggests that the halving’s impact on price may be less dramatic than expected. This is due to the decreasing supply of newly minted Bitcoin being overshadowed by increased selling from long-term holders.
CryptoQuant highlights a crucial shift in market dynamics. They argue that the primary drive for Bitcoin’s price trajectory post-halving will likely come from increasing demand among “whales”. These are investors holding substantial Bitcoin reserves, particularly those holding between 1,000 and 10,000 Bitcoins, which could contribute to a positive price trend.
Historically, halving events have coincided with times when demand significantly exceeded the reduced supply, driving prices upward. However, from 2021 to 2023, demand from long-term holders already surpassed the inflow of new supply.
This trend continued in 2024, with long-term holders accumulating a remarkable 7x more Bitcoin monthly than the newly issued amount. With the launch of Bitcoin ETFs and increased demand from whales, coupled with a pre-existing supply-demand imbalance, the upcoming halving might not trigger a price surge as significant as those seen in the past.
While a price increase is still a possibility, the market may have already factored in a portion of the anticipated rally.
