Bitcoin Halving Impact: Is it Losing its Influence on Prices?
As the Bitcoin halving approaches, you may be wondering about its potential impact on prices. While historically, the halving event has sparked price surges, analysts are now suggesting that its influence may be diminishing.
Bitcoin Halving Influence Wanes
Let’s delve into the factors contributing to this shift in dynamics:
- The upcoming halving will decrease new BTC issuance by 14,000 monthly, reducing sell pressure from miners.
- However, the significance of halvings on Bitcoin prices is diminishing as the new issuance becomes smaller relative to the total available supply for sale.
Role of Long-Term Holders (LTH)
Examining the impact of long-term holders on the market:
- LTH selling averaged 417,000 BTC per month in the last year, far exceeding the monthly issuance of 28,000.
- CryptoQuant notes that Bitcoin demand growth, primarily from large holders or whales, is emerging as the primary price driver post-halving.
Rise in Demand from Large Holders
Here’s how demand from large holders is shaping the post-halving scenario:
- The current demand growth from large holders is at its highest level ever, around 11% month over month.
- Historically, such demand spikes have fueled significant price rallies in previous cycles.
“In previous cycles, Bitcoin demand growth from large holders or whales has spiked, fueling the price rally. Currently, demand growth is around the highest ever, around 11% month over month,” an analyst at CryptoQuant highlighted.
Impact of Permanent Holders
Here’s how permanent holders are contributing to the post-halving scenario:
- Demand from permanent holders is now surpassing issuance for the first time in history, setting the stage for a potential price rally after the halving.
- Permanent holders are adding approximately 200,000 BTC monthly to their balances, exceeding the monthly issuance by a significant margin.
Issuance vs. Total Available Supply
Understanding the decreasing significance of issuance compared to the total supply:
- The monthly issuance of Bitcoin now represents just 4% of the total available supply, a stark contrast to previous halving cycles.
- Before the first, second, and third halvings, issuance represented 69%, 27%, and 10% of the total supply, respectively.
Hot Take: Will Large Holders Drive Bitcoin Prices Post-Halving?
Considering the evolving dynamics of the market, it seems that large holders and permanent holders are poised to play a crucial role in determining Bitcoin prices post-halving. As the halving event approaches, keep an eye on these key players in the crypto space to gauge potential price movements.