The fourth Bitcoin halving is here, and we’re excited to see how the event will reshape the crypto market for the following four years. During these times, the cryptocurrency and blockchain undergo significant changes, as the halving lowers supply, increases demand, and requires more mining capacity.
Therefore, the Bitcoin halving is boosting prices, and investors have made their stashes of Bitcoins long before the event, as learning how to buy Bitcoin now might not be convenient. Experts state that Bitcoin’s demand will be five times greater than its supply, triggering a significant uptrend shortly.
However, considering how powerful Bitcoin is within the crypto market, we’re convinced it will affect cryptocurrencies and the trading flow, so here’s what might happen with crypto in the following months.
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Users will feel the impact only months later
Although the halving has already occurred, investors must wait at least two months to reap the benefits of increased prices until the decreased supply stabilizes. Usually, it takes about 50 to 100 days for the halving prices to have an impact, so building a stable portfolio even now is important.
Portfolio diversification is key during these moments because it helps you prepare for an eventual market fall in case the investor sentiment is negative and the prices are falling. Some crypto experts expect altcoins and meme coins to receive considerable inflow from Bitcoin’s investments, so make sure you look into Ethereum or Shiba Inu.
Transaction fees will explode
Unfortunately, since miners will experience a new mining reward, lowered from 6.25 BTC to 3.125 BTC, this poses significant risks for them and the network. As there might be fewer miners to protect the blockchain, transaction fees will reach astronomical levels since the scarcity of miners makes transactions valuable.
This might not be the best news for investors, as the network has registered some fees of no less than $200, meaning there are risks of increasing at any point. However, miners need these transaction fees to be more significant since the reward block diminished considerably. So, at least for a few months, they’ll have the time to sustain mining and find reliable income streams.
The fear and greed index might suddenly change
Experts use the fear and greed index to measure investors’ sentiments about investing in the crypto market. The index is currently at the third level of greed, up to 74 scores, which may develop into extreme greed in the future.
Although this is a good sign for investors, crypto experts warn them to be extremely cautious when others are greedy. Many users are influenced by their positive bias instead of carefully investing and planning. That’s because many investors are affected by FOMO, so they trigger the greed index to boom, but the market’s volatility can take another turn.
Bitcoin liquidation risks on the rise
Unfortunately, avoiding liquidation during Bitcoin trading is pretty tricky, especially when many traders lose their initial margins. Users who prefer margin and futures trading must be careful during this period due to the high volatility moments after the halving and the considerable influence of geopolitical news.
Escalating tensions in the Middle East influenced companies, independent investors, and traders to take it easy for the moment, increasing liquidity for some time. Therefore, users must learn how to improve their stop loss to limit potential losses.
Bitcoin mining will shift to a globally dispersed model
Since miners’ rewards decreased, a new model is sought to allow them to benefit from improved energy resources that will help mitigate income better. The United States, China, and Russia are leading players in the industry, but they might swiftly expand their computational power to markets in Africa, Latin America, and Asia.
Many mining companies have already approached energy consumption from countries like Argentina, Bhutan, or Paraguay to improve their computational costs. This movement will benefit Bitcoin in the long run because it can boost the hash rate evenly across the globe and navigate toward regulatory implementation.
On the flip side, spot BTC ETFs have boosted demand
The 2024 halving was like no other, mainly because BTC-based assets, such as spot BTC ETFs, have boosted prices and demand. These assets have been incredibly appreciated recently, as they provide numerous benefits, including the fact that users don’t have to acquire the cryptocurrency but can take advantage of its features.
BTC ETFs offer convenience, great diversification, and tax efficiency, so since the first ETFs were approved, investors packed their portfolios with them to be the first to start the trend. Fortunately, more ETFs will become available for the public as regulation expands, so we’re expecting Ethereum ETFs to make waves on the market as well.
How should you prepare for the following halving?
Although the current halving has recently started, investors and crypto users should be wary of the next halving that will happen in four years from now, and the following ones, because they’re considerable events that shake the entire market.
For now, the best strategy is to invest and even trade for the long term because it’s the only strategy that builds up value for longer through diversification and strengthens the portfolio as it undergoes volatility seasons. Long-term strategies also help investors realize how the market truly changes, as analyzing trends and behaviors for longer shapes a less biased opinion about Bitcoin and crypto altogether.
The fifth Bitcoin halving will continue to lower rewards, and miners will only receive 1.5625 BTC per block. Until then, many things will change regarding cryptocurrency, but as long as miners and investors prepare to foresee the future, they can withstand any change.
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How were you affected by the Bitcoin halving?
The Bitcoin halving is an event that occurs every four years and lowers the mining reward. This action lowers supply and boosts demand, so it’s a positive and lucrative time of the year for investors and those who want to make some more income. However, anyone should be wary of Bitcoin halving because it can trigger less promising and profitable turns.
