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Highlights
- Bitcoin halving in April will reduce the amount of newly minted coins from 900 to 450.
- Surge in demand for ETFs coupled with expected supply crunch promises a ballistic bull run.
- Bitcoin price tops $72,000 ahead of halving while experts foresee rise above $100,000 in 2024.
Bitcoin price is rising and lifting prices across the crypto market with it at the beginning of the week. Although April commenced with dismal performance, as BTC price plummeted to $65,000, the month could gradually pick up the pace to new all-time highs.
Bitcoin Halving On The Horizon
Bitcoin halving, an event engraved in the blockchain to take place every four years, is expected in less than three days. This process refers to slashing the rewards miners receive for each block of transactions they produce by half. For instance, in the cycle likely to conclude in less than a week, miners have been earning 6.25 BTC which will now go down to 3.125 BTC.
Halving is essential for Bitcoin’s future as a currency and store of value because it ensures inflation is controlled. At the same time, it has been known to be a market mover because, with the reduced miner rewards, supply shrinks.
Should demand for BTC remain the same or increase, there is a possibility of prices increasing exponentially. Besides that, the event positively impacts the entire crypto market bolstered by enthusiastic sentiment.
Net Bitcoin ETF Inflow Volume Nears $13 Billion
The sustained increase in the demand for Bitcoin ETFs, which started trading in January, has kept Bitcoin prices elevated for months. Despite several significant corrections, BTC has managed to recover riding on this consistent demand.
According to data highlighted by SoSoValue so far, the cumulative total net inflow holds at $12.61 billion. In spite of the negative net inflow associated with Grayscale’s GBTC ETF, the total daily net inflow has majorly been in the green for the other ETFs, led by BlackRock’s IBIT.
As of April 5, the daily total net inflow increased to $203 million with a total value traded of $2.39 billion and $56.96 billion in total net assets.
Bitcoin Price Prediction: Can Supply Crunch Blast BTC to $100,000?
Bitcoin is one of the few assets that have a maximum supply, of precisely 21 million units. Experts believe with more than 19 million of the coins already mined, the supply is bound to shrink more.
Interest in the ETFs especially among retail and institutional investors means that daily demand significantly surpasses daily supply. According to an article published by Forbes, the available supply on exchanges has dropped to the lowest point in six years.
Moreover, demand may continue to outdo supply for the foreseeable future with current figures standing at 2.8-to-1. Based on insight from Blockforce Capital’s Portfolio Manager, Brett Munster, “This does not include the bitcoin purchased by anyone directly on exchanges.”
Following the halving, the newly minted BTC will drop to 450 per day, significantly changing the ratio of demand to supply approximately 5.7 times. Unlike the bull runs (2010, 2013, and 2017) where the supply of tradable Bitcoin was rising, “This will be the first full cycle in which the available supply on exchanges will be decreasing,” Munster added.
Investors buying Bitcoin ahead of halving should be open to the possibility of Bitcoin not picking up the pace immediately. According to previous post-halving bull cycles, there is often a “run-up to the halving, a bit of a drop-off and sideways movement for a couple of quarters after that, and then the real bull market begins,” Tim Enneking, a managing partner of Psalion said in a statement.
Bitcoin price is hovering at $72,290 after breaking two key barriers at $70,000 and $72,000. Traders would be looking out for a daily close above $72,000 to validate the uptrend heading into the halving.
Key indicators like the Relative Strength Index (RSI), and applied moving averages like the 20-day EMA, the 50-day EMA, and the 200-day EMA back the uptrend, which has the possibility of tagging new record highs this week. Bitcoin price surged to a new all-time high of $73,737 in March.
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