Is a 3200% Increase Possible After a Potential Supply Tightness?
The cryptocurrency market is anticipating the upcoming Bitcoin halving, which will reduce miner rewards by 50% as bulls point to another price increase. A new market report from a crypto analysis firm CoinGecko It shows a steady increase in Bitcoin price after each halving and a doubling situation with diminishing returns.
Bitcoin gained an average of 3,230% after the previous three halvings, and bulls predicted a price increase that marked historic events. However, bears and short traders are concerned about supply shortages, selling pressure, crypto regulations, macroeconomic factors, etc. He thinks that the increase will not be as high as previous halvings due to this.
Historical Trends in Bitcoin Price
tendency Bitcoin halving has dominated the crypto spaces in the last few months. From miners and traders’ positioning to reserve flows and centralized exchanges, analysts have linked price movements to the historic bullish event.
The first halving in November 2012 reduced the rewards from 50 BTC to 25 BTC. Within a year after the halving, the price increased by over 8,000%, from $12 to $1,075. The second halving in July 2016 reduced fees to 12.5 BTC, a 294% increase year-on-year. Bitcoin price rose from $650 to $2,560 within a year after the halving.
The third halving in May 2020 reduced the rewards to 6.25 BTC and the price increased from $8,727 to $55,847. Analysts have signaled diminishing returns regarding post-halving price movements and how this could impact the next event.
Diminishing Returns to Slow Price Growth
Like Bitcoin adoption As it grows and market capitalization increases, the market becomes more saturated, leading to a more efficient price range for the asset. This is because the flow of new Bitcoins has slowed down as the supply is limited to 21 million tokens.
The market, which currently has 19.6 million assets issued, is expected to see an inflow of 6.7% in the future. “This means that the price of Bitcoin will increase if demand exceeds the current inflation rate of 1.74%. In contrast, demand for Bitcoin in the fourth halving will be approximately April 20, 2024“It will just have to overcome inflation of less than one percent.”
Also read: Paradigm to Raise $850 Million in Biggest Fundraiser Since Crypto Winter
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The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. Neither the author nor the publication accepts any liability for your personal financial loss.
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