We are approaching the Bitcoin halving, a catalyst for the price of Bitcoin and a typical sell-the-news event. What should we expect to happen with the price of Bitcoin before and after the halving? How much is 450 Bitcoin less per day in the big picture when we look at the overall trading volume of Bitcoin?
There are all sorts of theories on how the Bitcoin halving will influence the price of Bitcoin and all the other cryptocurrencies. We know that if Bitcoin drops in price, the entire market follows, meaning that the Bitcoin price is of great importance to everyone, both Bitcoin holders and those who are all-in on different altcoins.
Many people say that the 12-18 months following the Bitcoin halving normally tend to be extremely bullish, but this time, the bullish sentiment has arrived earlier than normal. For example, Bitcoin normally doesn’t reach an all time high before the halving, only after. This time it is different. Will this also influence the Bitcoin price after the halving? Maybe we will not see a rally after the halving like we are used to?
It is impossible to predict, but let us take a look at the pure numbers and try to understand what the actual halving means in real life.
What does the halving mean in real life? How much will the change from 900 BTC to 450 BTC per day mean?
Every four years we experience the so-called Bitcoin halving. The daily rewards are cut in two, meaning that the number of new Bitcoin created becomes half of what it has been until before the halving. Since 2020, the number of new Bitcoins created daily have been 900, and after the halving in April 2024, this number becomes 450. What does this mean for the price?
Let us look at it from a random perspective with these numbers.
- Daily Bitcoin overall volume (March 22, 2024) – approx. $40,000,000,000
- Value of 450 Bitcoin (450*$67,000) – approx. $30,100,000
What do we see from these numbers? If we believe that all miners who earn BTC decide to sell the Bitcoin at once at a price of $67,000 per BTC, then there will be $30,000,000 less of selling pressure per day. This is less than 0,1% of the total Bitcoin volume per day.
That doesn’t sound like a lot, but do not forget that the total volume per day isn’t just people who either buy or sell their long-term Bitcoin positions. A big percentage of the trades are those swing-trading, meaning that they sell and buy and sell and buy, with no intention of actually getting rid of their Bitcoin.
We should also remember that 0,075% might not sound like a lot, but during the bear market in the start of 2023, there were days when the total volume for Bitcoin was below $10,000,000,000. On such a day, that number would be 0,3% of the total Bitcoin volume.
What do we make of these numbers?
The halving will influence the selling pressure, but it will not have an extreme impact at once. But, if you approach it with the perspective that people want to buy a total of 10,000 BTC per day, and only 450 BTC are created, and most people already owning Bitcoin are hodlers, it gives the foundation for a price increase.
What do you think? How will the Bitcoin price be influenced by the halving? Will the fact that only 450 new BTC will come into existence daily cause the price to increase due to hype or does it really matter that 450 less BTC will enter the market daily?
