The impact of the bitcoin halving is not over. What's next?

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Key Facts: Runes is a catalyst that can benefit the bitcoin market. According to CoinMetrics, selling pressure from miners would not impact the price of BTC. A month after the fourth halving in the history of bitcoin (BTC) took place, the analysis firm, CoinMetrics, highlights its relevance for the future of the market. In a report, he specifies about this event that “the long-term impacts have not yet materialized.” “Although there is no guarantee of future performance, bitcoin's most significant periods of appreciation often occur many months after the halving,” he adds. The following graph, provided by TradingView, shows how bitcoin appreciation has historically occurred about six months after each halving:

The price of bitcoin tends to rise about six months after each halving. Source: TradingView. For now, as an optimistic sign, he sees that “the demand side is back in the driver's seat.” This is, he clarifies, while the influence of the halving in the narrative of cryptocurrencies is receding, with respect to the selling pressure of the miners. “One of the main concerns leading up to each halving is the selling pressure that miners could introduce to the market,” he says. This is because the halving reduces by half the amount of bitcoin obtained as a reward for mining, which directly impacts the income of these actors. However, he highlights that miners selling pressure is now moderate, with issuance well below the threshold necessary to significantly move the price of bitcoin. In this sense, he perceives that “the market can comfortably absorb” the additional offer of these actors without negatively impacting the market. This report is presented, as reported by BitcoinDynamic, while bitcoin remains trading around USD 65,000, showing recovery from a relapse to USD 56,000.

“The bitcoin halving in 2024 was the most important in its history”

For CoinMetrics, “the bitcoin halving in 2024 was the most important in its history, as it launched a new token protocol and tested the balance sheets in a multi-billion dollar industry.” The analysis firm emphasizes that, compared to previous halvings, mining has reached an unprecedented scale, with multi-million dollar investments in hardware and infrastructure that improve its cost-income ratio. In addition, he adds that the launches on the Bitcoin network of the Ordinals protocols last year and Runes with the recent halving, which allow new tokens, They reinforced the income of miners. He details that, with the latter, an increase in traffic on the network was triggered, which increased the transaction fees they charge to record prices. “New protocols like Runes offer insight into catalysts for increased revenue, but these markets remain immature, leaving significant gaps in mining profitability assumptions,” he says. Therefore, the firm sees the development of this type of advances in the industry as crucial, impacting the supply of miners in the market. On the demand side, although CoinMetrics does not mention it, there is a growing wave of institutional and corporate investment in bitcoin, through the ETFs that were approved in January in the United States. BitcoinDynamic has reported that important financial entities, not only in the United States but also in Canada, are investing hundreds of millions of dollars in these ETFs. It can be expected that if this trend continues, it will represent a major bullish driver for bitcoin.