March 10 Series: “Exploit” of the half-season – Deciphering Bitcoin
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Part One: Referring to the previous half-seasons and explaining the difference in the following season
What is Bitcoin halving?
The Bitcoin halving is a significant event in the world of cryptocurrencies, and occurs approximately every four years, or every 210,000 blocks mined. This mechanism, built into the Bitcoin protocol by its founder – Satoshi Nakamoto, halves the reward for new block miners. As a result, the rate of new Bitcoin issuance decreases, which helps reduce the inflation rate and moves closer to Bitcoin's final limit of 21 million coins. Halving events are programmed into Bitcoin's monetary policy, scheduled and run until 2140, when the last Bitcoin will be mined.
Experience from the previous half season
The Bitcoin halving event not only affects miner rewards and the supply rate of Bitcoin, but is also closely linked to the value of Bitcoin as a form of censorship-resistant digital gold. Bitcoin is a valuable asset, which can serve as a hedge against inflation. The halving event demonstrates Bitcoin's predictable and transparent monetary policy, which is distinct from the unpredictable and unpredictable monetary policy of national currencies.
Effects of the previous halving event
Previous halving events have attracted attention because they are often preceded by significant price movements in the Bitcoin market. The first halving event in 2012 increased the price of Bitcoin from around $12 to nearly $1,150 in a year. Likewise, the 2016 halving event was accompanied by a series of strong price increases, which led to Bitcoin prices reaching their peak in December 2017. Although it is possible to argue about the causality between halving events and other increases in market prices, these observations They show that the market perceives that there is a decrease in supply with an increase in demand.
What makes the difference this time
The upcoming halving will be the first time it faces a combination of multiple trends and market developments, creating an optimistic backdrop unlike any previous halving. The most important thing in this “perfect storm” is that a series of Bitcoin exchange-traded funds will be launched by major financial institutions in the United States. This not only enhances the convenience and credibility of Bitcoin, but also integrates it deeply into the traditional financial system, broadening its appeal and potentially increasing demand for it.
Impact of ETFs and New Trends
Since the introduction of the Bitcoin ETF in the US, Bitcoin prices have been rising, reaching a new peak this week. With the trading volume of US-listed Bitcoin ETFs exceeding $10 billion, this demonstrates growing interest from institutional and institutional investors. The drama is a testament to how funds can facilitate an influx of new capital and strategic profits from traders looking to capitalize on recent Bitcoin price increases.
Conclusion: A series of positive events for Bitcoin
The unique combination of institutional adoption of Bitcoin through ETFs and preparations for the Bitcoin halving event creates a new phase unparalleled in the history of Bitcoin's development. As interest from both institutional and retail investors continues to expand, access becomes easier through ETFs, and the market braces for the impact of the upcoming halving, we may be on the cusp of a “perfect storm,” poised to enter into a long-term period of growth and positive market sentiment for Bitcoin.
