Fun

How will the Bitcoin halving affect ETH price?

News Feed - 2024-03-12 10:03:00

Robert D. Knight10 hours agoHow will the Bitcoin halving affect ETH price?The Bitcoin halving will likely positively affect Ethereum and the broader crypto market, according to multiple industry insiders.4850 Total views15 Total sharesListen to article 0:00AnalysisOwn this piece of crypto historyCollect this article as NFTJoin us on social networksA number of factors are making the upcoming Bitcoin (BTC) halving in April the most highly anticipated in the history of crypto.


Three previous Bitcoin halvings have occurred on Nov. 28, 2012, July 9, 2016, and May 11, 2020. This time, the halving follows the United States Securities and Exchange Commission (SEC) approving the first-ever spot Bitcoin exchange-traded funds (ETFs) in the U.S., massively increasing the hype around the event.


The ETFs are not the only factor increasing expectation levels. Julian Grigo, head of institutions and fintech for Safe — the creators of SafeWallet — told Cointelegraph the Bitcoin halving is an important reminder of what separates Bitcoin from fiat currency.


This Bitcoin halving comes following a period of higher-than-average global inflation.


“After two years of higher inflation in the U.S. and the eurozone and even higher in other economic areas, an asset with a fixed supply is really appealing to investors,” said Grigo. “The Bitcoin halving event will serve as a reminder of that.”


“It reminds global investors and observers of one of the key features of Bitcoin: a fixed supply schedule that no one can change. In this regard, Bitcoin and other cryptocurrencies stand in stark contrast to currencies issued by nation states such as the U.S. dollar.”


According to Grigo, however, this limited supply is even more true of Ether (ETH) right now.


“Bitcoin’s supply is still growing — just at a lower speed. In contrast, Ether’s supply is actually decreasing. From that perspective, Ether can be seen as an even better store of value [...] Therefore, I would not be surprised to see Ether benefiting from the halving event even more so than Bitcoin,” he said.Market volatility and price surges


Joey Garcia, director and head of public affairs, policy and regulation at Xapo Bank, told Cointelegraph he expects the halving to be a positive for Ethereum and the broader market.


Garcia states, “The mechanism is designed to mimic the scarcity and deflationary aspect of precious metals.” He adds, “The indirect effect that this can have on Ethereum and the broader market is interesting.”


He said the halving can positively affect market sentiment and “result in more resources and innovation flowing into wider ecosystems like Ethereum.”


Recent: Is GameFi subject to the same market forces as the traditional game industry?


The scarcity Garcia refers to is the reduction of mining rewards from 6.25 BTC to 3.125 BTC. Naturally, this is expected to put increased pressure on the supply side of Bitcoin.


Alun Evans, co-founder of Laos Network, a universal layer-1 for digital assets, told Cointelegraph, “While this event directly impacts Bitcoin, its implications are felt across the entire crypto ecosystem, including Ethereum.”


Evans adds, “The reduced supply of new coins entering the market can lead to scarcity. If Bitcoin’s price rises post-halving, Ethereum and other cryptocurrencies will likely experience price increases as investors diversify their portfolios.”The price of Ether (purple) rose with that of Bitcoin (blue) following the halving in May 2020. Source: TradingView


Evans believes this may not be the wholly positive news many think it is. He told Cointelegraph that there could be some downside to rapid price appreciation in ETH. Evans argues, “a surge in Ethereum’s price is not entirely beneficial. While Bitcoin serves mainly as a digital storage of value or as a payment method, Ethereum underpins various applications and smart contracts.”


Therefore, a more volatile and unpredictable market could make Ethereum usage less palatable for users and developers alike. That’s an issue Ethereum developers will have to contend with during the next bull cycle.


“As Ethereum network costs increase, we’ll continue to see alternative layer-1 and layer-2 scaling solutions (e.g., multi-Ethereum Virtual Machine superchains) to improve the network’s scalability and reduce transaction fees, making it more accessible and cost-effective for users and developers,” says Evans.Is it the halving or something else?


While there are those attributing positive market action to Bitcoin and the halving, others point to additional factors. Siddharth Lalwani, CEO of Range Protocol — an infrastructure for on-chain asset management — is among those looking elsewhere to explain positive price appreciation for Ethereum.


“Bitcoin continues its parabolic rally as investors anticipate the upcoming supply halving event in the next few weeks,” Lalwani told Cointelegraph. “Reflected across steady inflows to Bitcoin ETFs, there are three core catalysts driving net positive market action: Ethereum’s Dencun upgrade in March, the Bitcoin halving in April, and the prospect of spot Ethereum ETF approvals by the SEC in May.”


But while most analysts are focusing on the positives of upward Bitcoin momentum, Lalwani predicts that Ethereum may lose out in the shorter term.


“As Bitcoin surges to all-time highs, liquidity is momentarily pulled from other sources like Ethereum and altcoins. Once the attention from Bitcoin moves away to the potential of an Ethereum ETF, liquidity will retrace and consolidate at high levels, leading to price rallies for the macro outlook,” said Lalwani.


Ultimately, Lalwani expects “a bullish trend to prevail for overall crypto markets in 2024.”


Jordi Alexander, chief alchemist at Mantle — a network for Ethereum rollups — is another who argues that Ethereum price appreciation shouldn’t be attributed solely to the halving.


“The sheer force of rallying Bitcoin prices has seen evident knock-on effects for Ethereum, backed by a resurgence of investor interest in crypto. Major industry milestones from the Ethereum Dencun upgrade happening in March, to Bitcoin halving in April and the possibility of a spot Ethereum ETF launch in May have sparked excitement all around,” Alexander told Cointelegraph.


Alexander added that “these events are predictable and largely priced in.”


Despite this, Alexander maintains that both Bitcoin and Ethereum remain great long-term investments.“As long as these two assets continue to have buyers, new money inflows will keep coming in — but at some point, there will be no tokens left to buy [...] We will eventually hit a point where token issuance becomes very low, and the supply squeeze will set in, leading to explosive movements.”


Aki Balogh is the co-founder and CEO of DLC.Link, a Web3 infrastructure enabling Bitcoin holders to self-wrap and engage with decentralized finance. Balogh told Cointelegraph he is very bullish on Bitcoin due to the halving, Ordinals and MicroStrategy “cornering the market,” all of which are “further reducing the supply.”


Recent: Can the digital euro actually find traction in Europe?


Balogh points out that “ETH and other tokens are highly correlated to BTC.”


“A lot of hedge traders trade ETH and other tokens against BTC instead of U.S. dollars to minimize [foreign exchange] risk. So, if BTC goes up, it will have a secondary effect of increasing the values of ETH and other tokens,” he said.


As Grigo neatly summarizes, “The Bitcoin halving is a megaphone for crypto as a new asset class, but Ethereum might have the loudest echo.”# Bitcoin# Ethereum# Bitcoin Price# Investments# Halving# Bitcoin Halving# Ether Price# Ethereum PriceAdd reaction

News Feed

Tristan Greene2 hours agoTwitter receives money transmitter licenses in three US statesMichigan, Missouri and New Hampshire have granted money transmitter licenses to Twitter Payments LLC, leaving 47 U.S. states yet to w
HKX joins list of crypto exchanges to quit Hong Kong market
Arijit Sarkar1 hour agoHKX joins list of crypto exchanges to quit Hong Kong marketHKX management advises users to withdraw assets following its decision to halt operations in Hong Kong due to regulatory compliance issues
Brian Quarmby2 hours agoNifty News: Murakami to step back from NFTs, Dan Harmon’s NFT show debut and moreTakashi Murakami said he might step back from NFTs but stay involved differently, Krapoplis is set to debut on Fo
Bitcoin, Ethereum Technical Analysis: ETH Above $1,600 as ‘Bellatrix’ Hard Fork Commences
Bitcoin, Ethereum Technical Analysis: ETH Above $1,600 as "Bellatrix" Hard Fork Commences Ethereum rallied on Tuesday, as founder Vitalik Buterin confirmed a part of the “Me
Gov. Tim Walz accepted — and returned — $4K donation from FTX exec
Turner Wright5 hours agoGov. Tim Walz accepted — and returned — $4K donation from FTX execNishad Singh and Sam Bankman-Fried contributed to the campaigns of two Minnesota policymakers mere days before FTX’s collaps
Finder’s Experts Predict Dogecoin Will Reach $0.16 This Year, Panelist Says ‘Luster Will Wear Off as Meme Coins Lack True Utility’
Finder"s Experts Predict Dogecoin Will Reach $0.16 This Year, Panelist Says ‘Luster Will Wear Off as Meme Coins Lack True Utility’ Panelists from the product comparison platfor
Coinbase posts $1.2B net income in Q1, surpasses entire 2023 earnings
Ana Paula Pereira2 hours agoCoinbase posts $1.2B net income in Q1, surpasses entire 2023 earningsCoinbase Q1 earnings exceeded full-year 2023 results thanks to market conditions driven by new Bitcoin ETFs.806 Total views
South Korea Jails Seven Masterminds of Country’s ‘Largest Crypto Fraud Scheme’
South Korea Jails Seven Masterminds of Country"s "Largest Crypto Fraud Scheme" Seven executives of the collapsed South Korean scam cryptocurrency exchange, V Global, were recently
Charlie Munger: Everybody Should Avoid Crypto ‘as if It Were an Open Sewer, Full of Malicious Organisms’
Charlie Munger: Everybody Should Avoid Crypto "as if It Were an Open Sewer, Full of Malicious Organisms" Berkshire Hathaway Vice Chairman Charlie Munger, Warren Buffett’s ri
Bitcoin To Hit $125,000 By Year-End If Trump Wins, Says Standard Chartered
Este artículo también está disponible en español. In a research paper dated October 24, Geoff Kendrick, Global Head of Digital Assets Research at Standard Chartered Bank,
Biggest Movers: XMR, LEO Move Towards 1-Week Highs on Thursday
Biggest Movers: XMR, LEO Move Towards 1-Week Highs on Thursday Unus sed leo was a notable gainer on Thursday, as the token surged towards a one-week high. The move comes as crypto
Bitpay Statistics Show the Use of Bitcoin for Payments Is Dwindling
Bitpay Statistics Show the Use of Bitcoin for Payments Is Dwindling The use of bitcoin as a digital currency for payments has gone down significantly, according to the numbers stem