The Bitcoin halving occurs every four years, reducing the block mining reward to control coin inflation and increase the scarcity and value of bitcoins over time. This event often disrupts the mining industry and impacts the price of the cryptocurrency. Historically, Bitcoin experiences a bull run leading up to the halving, with continued price growth for several months to a year after the event before entering a quieter period.
In the months leading up to the halving, Bitcoin had indeed entered another bullish cycle due to the anticipation of the launch of spot Bitcoin ETFs and the reduced block mining reward. However, now that both events have taken place, the price of Bitcoin has stabilized, and the community is eagerly waiting for the next market movements of the leading cryptocurrency.
Commissions Soaring
On April 20, at around 4 a.m., the Bitcoin blockchain reached a milestone of 840,000 blocks, marking the halving event. The block was mined by one of the largest mining pools, and the first-ever satoshi from this block was highly valued and sold at an auction for 33.3 BTC.
In addition, the mining pool profited significantly from transaction fees, which totaled 40.7 BTC (approximately $2.6 million) in the halving block. The first five blocks after the halving also contained high transaction fees, resulting in nearly $4 million in commissions. However, the average transaction fee gradually decreased to approximately $20 six days later.
This surge in transaction fees was not solely due to the halving event. The launch of the Runes protocol, a new fungible token standard on the Bitcoin network, further fueled the excitement. Runes offers new possibilities for developers and users, facilitating the creation of community-driven meme coins and enabling complex financial instruments directly on Bitcoin.
The timing of the Runes launch coincided with the halving to capture the increased attention brought by this event. Consequently, the launch of Runes led to heightened transaction activity, resulting in a spike in fees. In essence, Runes serves as an equivalent to BRC-20 tokens, but with the distinction that tokens are “sealed” rather than “written” into Bitcoin blocks using the UTXO model.
When Will the Price Surge?
Despite the community’s hope for an immediate price surge following the halving, only transaction fees experienced an immediate increase. This lack of an instant price boom can be attributed to the fact that the halving had already been priced in by the market during the preceding weeks of Bitcoin’s upward trajectory.
According to analysts at QCP Capital, the effects of the halving are expected to emerge after a few months, aligning with historical patterns. Previous halvings have been followed by a price increase within two to three months. However, experts at Forbes argued that the halving would have no significant impact on the price of Bitcoin, emphasizing that the event passed without meeting investors’ expectations.
Both perspectives hold some validity. When examining the BTC rate changes on a monthly basis over the years, no clear dependencies can be observed. However, when dividing the price chart into periods between halvings, distinct cycles emerge: a lull after the halving, a significant price surge in the first half of the cycle, a subsequent bottom in the second half of the cycle, and then halving once again.
Maximizing Growth Opportunities
Following the cycle theory, it is reasonable to anticipate Bitcoin’s growth in the coming months, potentially reaching new historical price highs and solidifying Bitcoin’s dominance in the market.
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By cleaning BTC in a timely manner, one can be prepared for any future events within Bitcoin’s cycles without being caught off guard.