The Significance of Bitcoin Halving
In a recent post on X, CryptoQuant CEO and founder Ki Young Ju discusses the behavior of US-based Bitcoin miners leading up to the upcoming halving. The halving is an event that occurs every four years in which the block rewards for miners are cut in half. This event greatly impacts mining economics as block rewards make up a significant portion of miners’ revenue.
Despite the halving approaching, US public mining companies have chosen to hold onto their Bitcoin rather than sell it. According to Ju, this is due to the supply shock effect that halving events have on the cryptocurrency. When supply decreases while demand remains constant, the price of Bitcoin tends to increase.
Impact on Big Players
This time around, the supply shock effect could be particularly significant because major players like Blackrock and spot ETF providers are now involved in the space. These entities need to purchase Bitcoin through regulated means, and if mining companies are holding their holdings tight, there will be limited supply available for these institutions to buy from.
An indicator that may reveal whether these institutions are exerting significant buying pressure is the Coinbase Premium Index. This metric tracks the price difference between BTC prices on Coinbase and Binance exchanges. A positive premium suggests high buying pressure from institutional traders using Coinbase.
BTC Price Outlook
Currently, Bitcoin’s price is hovering around $42,900 and has been range-bound recently.
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