Bitcoin’s market structure beneficial to price post-halving — Grayscale

Fundamental changes to Bitcoin’s demand-supply equation are likely to have a greater impact on the cryptocurrency prices following the upcoming halving, according to an analysis from asset manager Grayscale.

Historically, periods of price appreciation have followed halving events. However, a new factor will also impact Bitcoin performance for this April’s halving: exchange-traded funds (ETFs).

"Beyond generally positive onchain fundamentals, Bitcoin’s market structure looks beneficial to price post-halving," says the report.

Grayscale’s analysis points out that the current mining rate of 6.25 Bitcoin per block amounts to approximately $14 billion annually — considering the price at $43,000. In other words, to maintain current prices, $14 billion worth of buy pressure is required over the same period.

The selling pressure comes from Bitcoin miners. Every four years, Bitcoin undergoes a “halving” event that cuts the reward for mining a block in half. This slows down the rate at which new coins are introduced into the network.

According to Grayscale, the recent debut of nine Bitcoin ETFs on Wall Street could “serve as a counterbalance” to the miners’ sell pressure. “Bitcoin ETFs could significantly absorb sell pressure, potentially reshaping Bitcoin’s market structure by providing a new, steady demand source, which is positive to price.”

Bitcoin ETFs have seen positive demand. The recently launched products completed their first 20 trading sessions on Fev. 9 hitting the $10 billion milestone in assets under management (AUM). BlackRock’s iShares Bitcoin Trust is leading the way with BTC holdings worth $4 billion, according to data from BitMEX Research.

#news #btc #mining #halving #Grayscale

Feb-12-2024 09:08:00 AM