April holds significant importance in crypto as the much-anticipated 2024 Bitcoin halving event approaches. With this event scheduled for later this month, speculation abounds regarding its potential to ignite a price rally in the crypto space. Having already attained all-time highs earlier this year, the question arises: how much higher could Bitcoin go this year? Or what will happen to the market conditions post-halving? In this blog, let’s explore what will happen after Bitcoin halving.

Let’s quickly look at Bitcoin halving before we move ahead to see what will happen.

What is Bitcoin Halving?

The Bitcoin network generates new Bitcoins every ten minutes. In its initial four years, 50 new Bitcoins were released every 10 minutes. This number is halved every four years, a phenomenon known as “halving” or “halvening.” This historical context is important to understanding the significance of the upcoming Bitcoin halving 2024 event.

The number of new Bitcoins released every 10 minutes fell from 50 in 2012 to 25 in 2013. It further fell from 25 to 12.5 in 2016. Additionally, the reward was reduced from 12.5 in 2016 to 6.25 per block in the most recent halving that happened on May 11, 2020.

Post the 2024 halving, the reward will be further reduced from 6.25 BTC to 3.125 BTC. While previous halvings have consistently sparked bullish sentiments in the crypto market, the future remains a mystery, with recent price highs and a competitive mining landscape adding to the intrigue.

For detailed information on the Bitcoin halving, read here.

In the following section, let’s see the major dynamics that have redefined prevailing narratives around Bitcoin economics and reshaped the landscape of digital currency.

5 Major Dynamics That Has Redefined Bitcoin Economics

• Halving Price Dynamics

Historically, each halving event has catalyzed a meteoric surge in Bitcoin price, setting the stage for unprecedented growth. Despite a diminishing pre-halving rally trend, the historical pattern hints at the potential for Bitcoin to soar to new all-time highs post-2024 halving, continuing its trajectory of exponential appreciation.

• Approval of Spot Bitcoin ETFs

The approval of spot Bitcoin ETFs marks a watershed moment, unleashing a tidal wave of daily demand that outpaces new Bitcoin supply. With net inflows into U.S.-listed spot Bitcoin ETFs surpassing the pace of new issuance, the imbalance between demand and limited supply fuels upward pressure on prices, paving the way for a bullish market sentiment.

• Evolution of the Derivatives Market

The evolution of a robust, regulated derivatives market revolutionizes the narrative surrounding the halving. By enabling price hedging, managing demand risk, and facilitating actionable price discovery, the derivatives market empowers miners to navigate price fluctuations with strategic precision, mitigating selling pressure and driving sustained price growth.

• Impact on Miners

The impending halving poses challenges and opportunities for miners, catalyzing behavior and industry dynamics shifts. With decreased Bitcoin reserves held by miners and intensified competition amidst record-high hash rates, operational efficiency emerges as a paramount concern. This transformative phase may spark industry consolidation and innovation, driving mergers, acquisitions, and the pursuit of sustainable mining practices.

• The Rise of Ordinals

The surge in retail demand finds expression in the rise of Bitcoin Ordinals BRC-20 tokens, redefining the crypto landscape. These tokens, akin to “NFTs for Bitcoin,” amplify on-chain activity and transaction fees, bolstering miners’ revenue streams in the face of declining block rewards post-halving. Their emergence heralds a new era of innovation and engagement within the Bitcoin ecosystem.

Let’s focus on what will happen after bitcoin halving in 2024.

4 Major Things to Happen After Bitcoin Halving in 2024

• Demand is Key

The delicate balance between supply and demand lies at the heart of Bitcoin’s value. With the halving set to reduce the rate of new Bitcoin production, attention will naturally turn to the demand side of the equation. While the halving itself may only lead to a modest increase in price, the real impact hinges on shifts in investor sentiment and adoption. Demand becomes even more crucial in determining Bitcoin’s trajectory as the supply dwindles.

• Hodlers Will be Fully Invested

While the supply-side effects of halving may seem negligible, the reality is more nuanced. Many Bitcoin hodlers stay fully committed to their holdings, limiting the immediate impact of supply reduction. However, the interplay between marginal buyers and sellers becomes crucial in determining price movements. Past halving events and predictive models hint at substantial price surges, driven not solely by halving but also by a surge in demand.

• Bitcoin’s Scarcity Will Drive Huge Attention

Halving serves as a stark reminder of Bitcoin’s scarcity, a characteristic that is becoming increasingly appealing in today’s economic landscape. With growing concerns over fiat currency stability, Bitcoin emerges as a potential hedge against inflation and economic uncertainty. This renewed focus on Bitcoin’s limited supply, coupled with increased accessibility through avenues like ETF approvals, fuels a positive feedback loop driving adoption and price appreciation.

• The Halving-Day: A Non-Event?

Despite its significance, the halving day itself may not yield immediate fireworks. According to the efficient market hypothesis, such events should be priced well in advance. Market sentiments, as reflected in options trading, suggest cautious optimism, with a focus on mitigating downside risks rather than speculative bets on large price swings. While the medium-term outlook remains bullish, short-term fluctuations may reflect a gradual adjustment in market sentiment.

Bottom Line

The approaching Bitcoin halving 2024 is a testament to Bitcoin’s steadfast vision and pioneering mechanisms. With each passing day leading up to this significant milestone, it becomes increasingly evident that its repercussions may have considerable influence over Bitcoin’s future course and, consequently, the entire crypto landscape. Whether you’re an experienced investor or a novice, staying informed and actively participating within the crypto community during this time is more crucial than ever.

Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.