Digital asset manager Greyscale predicts 2024's bitcoin half will play out differently than the past three, with a new report highlighting the market impact of US spot bitcoin ETFs.
In a report released Friday titled “Halving 2024: This Time Is Really Different,” Grayscale analysts pointed to the Bitcoin ETF as providing a “new, steady source of interest” that could counter pressure from mining.
When the report stated that The price of Bitcoin Historically it has risen higher after each halving, as well as warning that other cryptocurrencies have halved mechanisms. Litecoin, did not see the same price appreciation after noon. The report's authors also highlighted that post-halving Bitcoin price increases were linked to “significant macroeconomic events” such as the European debt crisis and the Covid-19 pandemic.
The report points to evidence that “miners have long been preparing for a halving financial crisis,” such as fundraising and on-chain sales by the end of 2023. – And even if some miners withdraw from the market, the reduction in hashrate will make adjustments to the mining problem, ensuring that the network remains stable.
The authors of the report also pointed out the impact of Bitcoin ordinals writing and ETF flows on Bitcoin market structure. The first, as miner rewards decline, will serve as a bellwether for how miners are incentivized to protect the network, with the norm being “a new way to secure the network with additional transaction fees.”
Bitcoin ETFs, which saw $1.5 billion inflows in the two weeks since launch, “absorbed a post-halving sell-off equivalent to three months worth.” While Greyscale's analysts do not expect that “increased demand” to continue, they note that net inflows into EFAs will ease the pressure from mining production and could even result in significant inflows of around $10 million per day. “Mirror results of the other half.”
One bitcoin ETF that hasn't enjoyed a net return is Greyscale's own GBTC, which has seen billions of dollars in losses since its switch to bitcoin ETFs as holders took the opportunity to cash out. While funds have continued to move from GBTC to rival Bitcoin ETFs in recent weeks, those flows appear to have cooled.
Edited by Stacy Elliott.
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