©Reuters
The price trend of the US Spot Bitcoin Exchange Traded Fund (ETF) is currently under the influence of the much anticipated reward halving event.
Elitsa Taskova, chief product officer at Nexo, highlighted two contrasting scenarios post-halving.
Optimistic forecasts suggest that the price of Bitcoin could rise to $100,000 in 2024 if miners are able to leverage their holdings without directly selling them, a trend that asset managers and industry experts believe This is consistent with the widely held view.
Conversely, in less favorable conditions, Bitcoin's support level could be around $40,000, especially if mining facilities are forced to liquidate assets to fund operations.
The introduction of ETFs was a pivotal factor that propelled Bitcoin to unprecedented heights, hitting several all-time highs in a short period of time. However, as the ETF frenzy subsides somewhat, the crypto community's focus has shifted to the halving event, which is expected to be a key determinant of Bitcoin's future price trajectory.
That said, this halving is particularly unique as it is the first in Bitcoin's history to follow an ETF-led rally. The impact of reduced mining rewards on Bitcoin price is typically observed approximately 6 months after the halving. But with his new background of growth from his previous ETFs, the predictions are more speculative and navigating uncharted territory.
Overall, the halving event is expected to bring major changes to the Bitcoin mining industry. The future direction of Bitcoin's value could establish a new price equilibrium to support miners amid huge energy costs or trigger a sell-off to maintain operational liquidity. .
Additionally, we expect the significant impact on ETF purchases to exceed the normal impact of supply contraction that typically accompanies halvings. As we approach a point in the market cycle where supply dynamics are increasingly influenced by the actions of long-term holders, the sell-versus-hold choice becomes important in influencing market liquidity and sentiment.
Achieving a record peak before the halving also brings a new picture, but the development of the cycle is similar to the previous pattern when it coincides with the April 2021 high.
