The Bitcoin halving is, therefore, not a new event. Nevertheless, the hype has been building up as 2024 progressed. What makes the fourth halving different from its three predecessors?
Bitcoin ETFs to push the buying process of Bitcoin
The approval of Bitcoin ETFs in the United States made it easier than ever for traditional investors to buy BTC. The largest Bitcoin ETFs in the world hold billions worth of Bitcoin assets. They especially impacted the cryptocurrency’s price - and overall Bitcoin investor sentiment, or NVT ratio - in January 2024: The Bitcoin price fell to below 40,000 U.S. dollars after the market corrected following a push from individual investors to buy bitcoins ahead of the ETF approval. The sheer number of investors involved - and that the top Bitcoin ETFs together hold more Bitcoin than the number that will be released new in April 2024 - may spark a sizable demand. This much anticipation could potentially lead to speculation and volatility in the short term.Bitcoin and macroeconomics: A hedge against inflation, or not?
The halving comes at a time when both inflation and interest across many countries are at an all-time high. Consequently, Bitcoin and its potential gains could, for some, be a far more alluring investment option than putting money in a bank or other traditional investment options. Its potential gains could be so high that it effectively protects from high interest rates becoming a safe haven from monetary policies and macroeconomics. Whether Bitcoin is such a hedge has been a topic of contention. Some investors and experts believe Bitcoin is not too different from gold, a commodity that is rare and has a limited supply. Other experts point to the price volatility inherent to Bitcoin, as opposed to the security and consistency of gold. The halving in April 2024 could potentially bring out this volatility even more, for better or worse.
