Good evening, friends! The market is about to take off~
The latest BTC halving has been completed. At 8:09:27 am on April 20, 2024 (Beijing time), Bitcoin successfully completed its fourth halving at block height 840,000. At this point, the block reward obtained by "miners" for mining was halved from 6.25 bitcoins to 3.125 bitcoins.
Including this halving, Bitcoin has experienced four halvings, and the last halving occurred on May 11, 2020.
It is understood that Bitcoin halving refers to the halving of the transaction reward for "mining" Bitcoin (the Bitcoin reward is halved after every 210,000 blocks are mined), which occurs approximately every four years. Halving is also a unique feature of Bitcoin, which ensures the long-term sustainability and scarcity of Bitcoin as a digital currency while maintaining its value.
Before and after the past few Bitcoin halving events, the price of Bitcoin mostly showed varying degrees of increase.
According to the Digital Currency & Web3 Tracking Report released by Everbright Securities' overseas TMT team, in the 60 days before the four Bitcoin halving events, the Bitcoin price increased by -0.6%, 43.4%, 59.6% and 25.4% respectively. In this regard, Everbright Securities believes that since funds tend to deploy in advance before the halving, the marginal supply of new Bitcoin in the entire network is halved, and the scarcity of Bitcoin increases; and in the 180 days after the first three halvings, there was a bull market, and Bitcoin achieved price increases of 955.7%, 39.1% and 74.4% respectively.
Achieving the $100,000 goal
After the Bitcoin halving event, the price of Bitcoin rose slightly. As of press time on April 22, Bitcoin stood at US$66,000 per coin.
It is understood that Bitcoin halving occurs approximately every four years and is a key feature in Bitcoin's design. Its purpose is to introduce a regulatory model with deflationary properties for Bitcoin by reducing the rate at which new Bitcoins are produced.
Historically, Bitcoin has experienced four halving events, which occurred on November 28, 2012, July 9, 2016, May 11, 2020, and April 20, 2024, respectively. From the time interval, it occurs about once every four years. However, according to the rules, the time of Bitcoin halving depends on the accumulation of block height, which is about every 210,000 blocks mined, rather than a fixed time node.
The day before the halving (April 19), the price of Bitcoin crashed, with the largest drop exceeding 6%, and once fell below the integer mark of $60,000 per coin, setting the lowest price since March this year. In the week before April 19 (April 12 to April 19), the price of Bitcoin had fallen by more than 8%.
Regarding the "weakness" of Bitcoin prices before the halving, Joel Kruger, market strategist at LMAX Group, an independent operator of institutional execution venues for foreign exchange and cryptocurrency trading, recently publicly stated that market weakness may continue for some time. The latest blockchain data shows that large Bitcoin holders are unwilling to buy at the risk of current declines, which indicates that the market may still see continued declines or consolidation before Bitcoin is ready to recover.
It believes that the key technical level for Bitcoin to watch is $59,000, which is an important support area. If Bitcoin can stay above this level, it will continue to be able to hit new record highs and the $100,000 target. However, it points out that if the market sees more downward pressure, such as Bitcoin prices falling below $59,000, it may break the short-term bullish outlook, and a pullback into the $45,000-$50,000 range will also become possible.
A cryptocurrency industry insider told Times Finance, "Based on past experience, there will usually be a bull run in the six months after the halving, and there will be adjustments before and after the halving. But after our discussions, we all believe that as long as the price does not fall below $50,000 to $60,000 in the long run, it will still be a bullish trend overall, but whether it will rise to $150,000 remains to be seen."
Hong Kong, China enters virtual asset ETF
After launching the virtual asset trading platform licensing system in 2023, Hong Kong, China is bringing virtual asset OTC transactions under regulation, and mainstream institutions are actively deploying related assets.
According to a Huatai Securities research report, as of April 14, Hong Kong has approved two virtual asset exchange licenses, Hash Blockchain and OSL, and virtual asset management licenses for 19 institutions including Harvest Global. At the Web3 Carnival Forum hosted by Wanxiang Blockchain and HashKey Group, Wong Wai-lun, Deputy Financial Secretary of Hong Kong, said that the Hong Kong government is amending the law to include virtual asset OTC transactions in regulation and allow intermediaries to provide transactions in virtual assets, futures and ETFs.
This is the first time that spot Bitcoin and Ethereum ETF products have been approved in Asia after the first batch of Bitcoin spot ETFs were approved for listing in the United States.
On January 10, local time in the United States, the U.S. Securities and Exchange Commission (SEC) approved 11 Bitcoin spot ETFs for the first time and authorized the above ETF products to be listed and traded on January 11. According to statistics from Everbright Securities Research Institute, as of April 19, the cumulative net inflow of this batch of Bitcoin spot ETFs was approximately US$12.32 billion.
On April 15, the Hong Kong subsidiaries of three leading domestic public funds have obtained approval in principle from the Hong Kong Securities and Futures Commission to issue virtual asset spot ETF products. They are Bosera International, China Asset Management (Hong Kong), and Harvest Asset Management.
It is worth noting that Hong Kong, China, has also approved the Ethereum spot ETF in principle at the same time as the Bitcoin spot ETF, ahead of the United States. Huatai Securities believes that this move "may confirm that Hong Kong, China is actively deploying virtual assets." It also pointed out that unlike the United States, Hong Kong, China's virtual asset ETF may allow both cash and physical redemption, which is more advantageous in improving liquidity and price discovery.
The above-mentioned cryptocurrency industry insider told Times Finance: "Overall, the industry estimates that the scale of ETFs in Hong Kong, China will not be too high in the short term, and Wall Street ETFs will still dominate the market. However, it will be a trend for more places to be approved in the future."
03
Who will benefit?
As mining activities gradually move from decentralization to centralization, the United States has become the main mining base. Looking back at the past few halving events, the value of Bitcoin has reached a new high after each halving, which helps to alleviate the cyclical decline in mining rewards and the increase in operating costs.
However, competition in the industry is intensifying, and with it comes rising costs. As the virtual currency industry gradually develops, the returns of miners are gradually decreasing, and the high demand for electricity in the artificial intelligence industry has also pushed up the electricity costs of miners. Miners not only have to face gradually declining returns, but also face the survival dilemma of competing with technology companies for energy resources. The booming artificial intelligence business is also a high-energy consumption business, and technology "big companies" can pay higher electricity costs. This means that for mining, competition within and between industries will intensify.
But at the same time, along with the halving event, the Bitcoin Runes, which have attracted much attention in the currency circle, have been officially launched at the 840,000 block height.
Just two days after Rune was officially launched, it brought about a rapid increase in Bitcoin chain fees. Many industry insiders believe that it is expected to create another hot spot in the Bitcoin ecosystem.
Runes improve upon inscriptions to facilitate the deployment of assets directly within Bitcoin UTXO (unspent output).
Inscription is a technical protocol that assigns a unique number to each satoshi (the smallest indivisible unit of Bitcoin), which has brought about a phenomenal explosion in the Bitcoin network ecosystem. Rune is an improvement on Inscription, that is, issuing homogeneous tokens based on UTXO on the Bitcoin network. The token assets deployed by the Rune protocol will intuitively record information on the Bitcoin chain, that is, write it into the OP-RETURN field of Bitcoin UTXO.
According to Guosheng Securities Blockchain Review, since the launch at 8:09 on April 20, the Bitcoin chain fees generated by rune activities accounted for as much as 57.7% of the total fees on the day, while the fees on the Bitcoin chain were mainly traditional Bitcoin transfers. For block 840000, the fees generated were 37.626 BTC, which is 10 times more than the mining incentive, which is 3.125 BTC.
"After the inscription, the rune is expected to once again drive the rapid growth of Bitcoin chain fees, which is good for the computing power mining industry." Guosheng Securities commented. $BTC
