Bitcoin's halving event likely this weekend. Here's what to expect

What is halving?
Bitcoin rewards to miners are halved every four years. Miners are those who solve the complex cryptographic puzzle to create a new blockchain in the network and are rewarded for this effort through Bitcoins.

The creator, , had programmed it in such a way that after 210,000 blocks are mined, rewards to miners are reduced by half, which is approximately every four years.

This is the fourth halving event. The first halving in 2012 reduced the reward price from USD50 to USD25. The latest one will reduce the reward to USD3.125, which at the current level is valued at close to USD200,000. Bitcoin price stood at USD63,000 as of April 16.

Halving will continue till 2041 when all the Bitcoins are mined.

However, this event is expected to differ from previous ones, as recent geopolitical tensions between Iran and Israel have triggered . Bitcoin experienced a sharp decline, reaching its lowest level in a month. On Friday, Bitcoin slid more than 5.5% to $59,961 in the Asia session.

Here's how analysts see the impact of halving on Bitcoin's price

Manhar Garegrat, Country Head India & Global Partnerships at Liminal Custody Solutions
The Bitcoin halving could influence the price of Bitcoin due to its increased scarcity leading to upward price pressure and influx of new investors in the crypto market.

In addition to the potential impacts on altcoins, it's worth considering the possibility of new products being introduced into the crypto market. Just as spot ETFs are being launched around the world, innovative financial instruments may emerge in response to the dynamics surrounding the Bitcoin halving offering investors alternative avenues for exposure to digital assets.

Shivam Thakral, CEO of BuyUcoin
Bitcoin's price may experience short-term corrections or dips following a halving, but historical precedent suggests that the halving could catalyze significant shifts in the crypto market leading to a new all-time high in the upcoming months.

Jyotsna Hirdyani, South Asia Head at Bitget
Historically, post-halving phases have been characterized by significant market movements, with Bitcoin frequently reaching new all-time highs (ATH). Currently, with the approval of ETFs in the US and now in Hong Kong there has been a continuous inflow of funds driving Bitcoin prices to consecutive new highs. However, there is short-term uncertainty in the macroeconomic situation.

It is important to note the risk of pullback in Bitcoin prices due to the uncertainty in the macroeconomy despite positive market sentiment. If the crypto space runs on historical track record then within 10-18 months we can expect Bitcoin surging to new ATHs of $100,000 and more.

Jithin Mohandas, Research Analyst, Mudrex
Currently, Bitcoin is exhibiting a pre-halving retracement characterized by bearish signals and lateral market movements. A technical analysis of the weekly time frame reveals the formation of a Cup and Handle pattern in Bitcoin’s price chart. Traditionally, this pattern can proceed further downward movements. Notably, there is robust support within the $60,000 to $61,000 price range. Should this support level be breached, it is plausible to anticipate a retraction towards the $51,000 mark. In a worst-case scenario, prices could potentially decline to around $45,000 and it may indicate an interim bear market.

Rajagopal Menon, Vice President, WazirX
The general consensus is that prices should go up because of the supply shock but geo-political events such as the threat could cause the market to plunge as it did over the weekend.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

Source: Forex-Markets-Economic Times