In anticipation of the upcoming bitcoin Halving event, which is expected to occur later this month, Marathon Digital CEO Fred Thiel believes the price impact may have already been factored into the market to some extent. .
Thiel shared his ideas in a recent bitcoin-halving-rally-partially-priced-in” target=”_blank” rel=”nofollow”>interview with Bloomberg, in which he analyzed the possible catalysts for further price increases and their implications for the mining industry.
Impact of bitcoin Halving Mitigated by ETF Rising?
The “halving” event, a software code update that occurs approximately every four years, is often considered a key driver of bitcoin's price appreciation. The update will reduce the block reward for miners to halve, meaning they will receive fewer Bitcoins as a reward for validating transactions on the blockchain.
However, Thiel noted that The Halving's impact may not be as significant this time around, as the recent approval of bitcoin exchange-traded funds (ETFs) has already attracted substantial capital to the market. Thiel explained:
The approval of the ETF, which has been a huge success, has brought capital into the market and essentially brought forward what could have been the price appreciation that we would normally have seen three to six months after the halving. So I think we're already seeing some of that and that's driven some of the demand.
While the halving event is expected to reduce the daily supply of new Bitcoins at around 450, Thiel believes the price impact may be relatively modest.
However, Marathon's CEO expressed enthusiasm for the positive price trend that led to the halving, stating:
As miners we are very excited about the halving, where for once prices have not gone down before the halving, but have gone up, so obviously everyone is maximizing that.
Balancing ETF Inflows and Previous Halving Patterns
Thiel's remarks come amid notable capital inflows into bitcoin ETFs, which have amassed nearly $12 billion in just three months of trading in the United States.
While these inflows may have contributed to the current price appreciation, btc-halvings/” target=”_blank” rel=”nofollow”>historic information reveals that bitcoin still has considerable growth potential until reaching Halving.
To gain a comprehensive understanding, it is crucial to examine the recent surge in the value of bitcoin, which has soared nearly 370% from its bear market low of $15,400 to a its highest point (ATH) of $73,700 on March 14, 2024.
Along with this surge, past halving events provide valuable insights into bitcoin price movements and the probability to surpass the important milestone of $100,000.
During the first halving in November 2012, the price of bitcoin saw a notable rise from a low of $13 to a high of $1,152 the following year, illustrating an impressive 8,753% increase.
Similarly, in the second halving event in July 2016, bitcoin price rose from $664 to a new ATH of $17,760, reflecting a 2,580% increase after the halving.
In the most recent halving event, in May 2020, bitcoin price reached a major milestone of $67,000, rising from a low of $9,730, which represented a substantial 593% increase post-halving to the half.
For perspective, while the potential scenario outlined by Thiel suggests that The Halving may be partially priced in due to the influence of ETF inflows, historical patterns suggest that bitcoin still has plenty of room to run before the event.
Several market experts have also set your price targets for this bull run at the coveted $100,000 level in light of the upcoming halving event.
However, it remains to be seen how the bitcoin price will react, taking into account factors such as capital inflow through ETFs, historical data, and potential market dynamics.
Currently, btc is trading at $68,400, down 0.4% from yesterday's price.
Featured image from Shutterstock, chart from TradingView.com
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