At this point, 5 paths diverge.
Another Bitcoin halving has come and gone, the fourth so far, and this one was unlike any other before it, with institutional investment playing a key role for the first time.
Bitcoin halvings have historically been associated with one important similarity – a subsequent increase in the value of BTC, which usually occurs some time after the halving.
While the community cannot yet know whether the fourth halving will follow the same path, some things are already different about the Bitcoin 2024 halving.
Crypto user base has increased by at least 400% after halving in 2020.
Although the pace of the new Bitcoin generation has slowed since the first half, the demand has not stopped.
Since the last Bitcoin halving – which happened in May 2020 – the global crypto user base has increased by at least 400 million users, based on various sources.
According to the Cambridge Center for Alternative Finance (CCAF) estimates, by 2020, the number of crypto owners around the world will be around 100 million users. In the year By the end of 2023, the number of global crypto users has risen to 580 million people, as estimated by crypto exchange Crypto.com.
Although Bitcoin is the world's largest and oldest by market capitalization, it has fewer users than the entire crypto ecosystem.
According to data from Technopedia, it is estimated that 2.7% of the world's population will own Bitcoin by 2024, which translates to 219 million people. If correct, the estimated figure is 208% of the 71 million Bitcoin users four years ago, as calculated by Crypto.com.
As with Bitcoin or most other cryptocurrencies, on-chain transaction analysis often fails to distinguish between long-term owners and lost BTC, as well as other factors, so the majority of user estimates cannot be 100% accurate.
The 2024 pre-half bitcoin rally has never been seen before
One of the biggest differences between the fourth bitcoin halving and the three previous halvings is that the price saw an extraordinary rise in the pre-halving of 2024.
In previous cycles, Bitcoin prices have been recorded after halving, and new all-time highs have been reached almost a year after the date of the halving.
For example, Bitcoin never rose above the $20,000 ATH before the 2020 halving. During that cycle, Bitcoin price crossed the ATH 10 months after the halving. This time the picture is very different.
In the current cycle, Bitcoin reached an all-time high before halving, hitting a record high of $73,600 on March 13, 2024.
Such a crash is unprecedented, and many analysts agree, including eToro crypto analyst Simon Peters.
Miners are in ‘better shape' to cut this time in half.
The unprecedented pre-halving of Bitcoin's price appreciation could have a positive impact on the mining industry as it gains more control over mining.
“Compared to previous halves, miners seem to be in a better position overall with lower debt levels and better control of their costs such as electricity,” Chris Kuiper, research director at Fidelity Digital Assets, told Cointelegraph.
“Also helping miners in this cycle was the inflation that preceded the downturn – something that has not been seen in previous cycles.
Since the third half of May 2020, Bitcoin mining energy consumption has increased significantly, rising from 50 terawatt hours (Twh) to 99 Twh on April 18, 2024.
At the same time, the energy consumption of the Bitcoin network powered by renewable energy sources has also increased, with renewables accounting for 54.5% of BTC mining consumption by January 2024, according to Bitcoin ESG forecasts. As of September 2020, this figure stands at 39%, according to CCAF data.
First Bitcoin halving in the United States with spot BTC ETF
One of the most straightforward things about the 2024 Bitcoin halving is that this halving will be the first to be enabled by a BTC Exchange-Traded Fund (ETF) in the United States.
After years of efforts, look for Bitcoin ETFs to start trading in January 2024, opening up exposure to Bitcoin for institutional investors.
Related: The Halving Isn't Just Why Analysts Will Be Bullish on Bitcoin in 2024
According to Bloomberg ETF analyst Eric Balchunas, spot Bitcoin ETFs have seen “blockbuster success,” which clearly reflects an increase in demand for Bitcoin.
Since the first day of trading, all ten Bitcoin ETFs combined have increased their holdings by at least 220,000 BTC, which is around $14 billion at the time of writing.
BlackRock's Spot Bitcoin ETF attracted the biggest inflows among 10 BTC ETFs, with its holdings up more than 10,000% from 2,621 BTC in early trading to 273,140 BTC on April 18.
M2 CEO Stefan Kimmel said:
As we look at the vast landscape, gathering attention by halving it, we realize that it is part of a larger narrative. ETF mergers, quantitative easing and halving define future market trends.
Bitcoin has become globally decentralized and secure
Bitcoin has also improved significantly in terms of network security and decentralization. Since 2020 – when most new bitcoins are mined in mainland China – bitcoin has emerged as a more decentralized network.
Just four years ago, Bitcoin mining in China accounted for about 80% of Bitcoin's total mined hashrate globally. In the year By February 2024, the largest Bitcoin mining countries are the US with 40% of the total hashrate, as well as China and Russia with 15% and 12% respectively, according to Hashlab miner founder Jaran Maillard.
“This geographic decentralization continues as miners migrate to Africa and Latin America to take advantage of cheaper electricity prices,” Maillard said.
In addition, the Bitcoin blockchain's hash rate has increased by five times from its previous halving, making it more resistant to attacks.
“Attacking the network now requires five times the computing power and associated power supply, electrical infrastructure and mining hardware,” said Hashlab Mining's founder.
Magazine: Bitcoin Halving Raises Games, Shrapnel's ‘Easy' Secret Revealed: Web3 Gamer
