The much-anticipated Bitcoin halving event, occurring approximately every four years, has concluded with the reduction of daily miners’ rewards from 900 BTC to 450 BTC. This event, which took effect at block height 840,000 on April 19, aims to decrease the creation rate of new Bitcoins. Despite expectations of significant price movements, the Bitcoin price remained relatively stable, hovering around the $64,000 mark immediately after the halving. 

However, at press time, the bearish momentum had recouped market control, with BTC trading at $63,775.55, a 1.36% decline in the last 24 hours. 

BTC/USD 2-hour price chart (source: CoinMarketCap)

The reduction in miner rewards is expected to impact Bitcoin’s supply dynamics, potentially driving prices higher over the long term. Analysts anticipate this adjustment will act as a catalyst for bullish momentum, particularly with the additional demand generated by spot Bitcoin ETFs. Even lawmakers like Wyoming Senator Cynthia Lummis have voiced support for this development. However, some banking institutions, such as JPMorgan and Deutsche Bank, believe that the effects of halving have already been factored into the market.

Challenges and Opportunities for Bitcoin’s Price Post-Halving

While the successful completion of Bitcoin’s fourth halving event is a milestone for the cryptocurrency, it does not guarantee an immediate surge in price. Analysts suggest that broader macroeconomic factors, including signals from the Federal Reserve indicating a pause in interest-rate cuts and escalating tensions in the Middle East, pose challenges to Bitcoin’s short-term price prospects.

One significant consequence of the halving is the potential impact on Bitcoin mining firms’ revenue. The reduction in miner rewards is likely to affect their profitability, potentially leading to billions of dollars in annual revenue losses. 

However, the extent of this impact may be mitigated if Bitcoin prices maintain their upward trajectory. Nonetheless, the immediate aftermath of the halving may see increased selling pressure from miners seeking to offset revenue losses, which could contribute to short-term price volatility.

Bitcoin ETFs Show Signs of Recovery Following Halving

In the wake of the Bitcoin halving, the market for Bitcoin exchange-traded funds (ETFs) in the United States has shown signs of recovery. On April 19, spot Bitcoin ETFs recorded a net inflow of nearly $60 million, marking a turnaround from previous outflow trends. Notably, inflows into Fidelity’s Bitcoin ETF (FBTC) surpassed those into BlackRock’s iShares Bitcoin ETF (IBIT), indicating renewed investor interest in Bitcoin following the halving event.

The positive inflows into Bitcoin ETFs coincide with ongoing price consolidation in the Bitcoin market, with the cryptocurrency trading around $64,000. Despite concerns about low trading volumes and geopolitical tensions, overall sentiment remains bullish, driven by expectations of long-term price appreciation. 

Analysts highlight the historical pattern of Bitcoin price peaks occurring approximately 518-546 days after halving events, suggesting a potential upside in the coming months.

As Bitcoin transitions into the post-halving phase, market participants are closely monitoring price movements and investor sentiment for signals of future trends. While the halving event symbolizes Bitcoin’s continued maturation as a digital asset, its immediate impact on price dynamics remains uncertain. Some analysts caution against expectations of an immediate price rally, citing factors such as overbought conditions and subdued venture capital funding in the crypto industry.