As the cryptocurrency market navigates through volatility, attention is shifting towards the anticipated Bitcoin halving event. Historically, this event has catalyzed significant price changes. Industry leaders are sharing their insights on the potential implications of the forthcoming adjustment.
Industry Leader Anticipates Major Price Swings
Hunter Horsley, CEO of Bitwise, has expressed that the upcoming halving could be the most significant yet, potentially leading to considerable price fluctuations. Horsley notes that the reduction in Bitcoin supply during this halving could have a more substantial effect given the higher current price of Bitcoin compared to the previous halving in 2020. The event is expected to take place on April 19th and is believed to be a key factor in driving up Bitcoin’s price.
Halving in the Broader Economic Context
Looking at the broader economy, the last Bitcoin halving coincided with major monetary policy shifts, such as the Federal Reserve slashing interest rates and implementing a massive quantitative easing program. Market participants are now speculating whether the Bitcoin ETFs, which have been active for approximately three months, will influence Bitcoin’s trajectory similarly to the Fed’s interventions. Horsley suggests that such underlying economic conditions will likely enter the conversation surrounding this halving as well.
Miners Bracing for the Halving Impact
A Hashrate Index report indicates that if Bitcoin prices remain stable or rise moderately post-halving, an estimated 3-7% of the Bitcoin hashrate might be decommissioned. This will trigger changes in the mining difficulty. Conversely, a substantial price decline could force a larger share of the hashrate to go offline swiftly. Miners may thus prioritize increasing operational efficiency to mitigate volatility and risks following the halving event, with profitability margins expected to be tight temporarily.