Why This Bitcoin Halving Is Different From Previous Ones: Coinbase Analysts Give Their Take

The cryptocurrency market is eagerly awaiting the upcoming Bitcoin (BTC) halving. According to Coinbase analysts, this event is likely to be different from previous ones, mainly due to the emergence of spot Bitcoin ETFs in the United States, the active supply of Bitcoin and their significant impact on the market.

Analysts shared a detailed report with BeInCrypto, delving deeper into these changes and providing insights that illustrate the uniqueness of the current cycle.

What will affect the current Bitcoin halving cycle?

Historically, halvings have reduced rewards for Bitcoin miners. will lead 2024 application Reduce issuance from 6.25 bitcoins per block to 3.125 bitcoins. Although historical data provides some guidance, the limited number of past events limits the ability to accurately predict future price movements.

The halving mechanism is designed to mitigate inflation and impact the market price of Bitcoin. However, to truly understand Bitcoin's halving potential, investors need to study the detailed dynamics of supply versus demand.

Remarkably, since the start of the fourth quarter of 2023, the active supply of Bitcoin has increased significantly, exceeding 1.3 million. Cumulative ETF Flows. This shift signals a deeper shift in market behavior, particularly with the presence of institutional investors through ETFs, adding a layer of complexity.

A decrease in the supply of Bitcoin usually leads to speculation about a price increase. However, this course requires a reevaluation of these assumptions. The analysis must take into account the nuances of sales activities of minors, Long-term holder actions and liquidity related to the use of Bitcoin collateral.

However, he realized Overview of Spot Bitcoin ETFs To radically change the scenario. These financial products have seen massive inflows. Which led to a radical change in the way investors handled this halving.

This cycle is therefore characterized by a continuous influx of ETF investments in exchange for an increase in the active supply of Bitcoin. This scenario challenges the simple narrative of scarcity and calls for a nuanced understanding of supply and demand. Coinbase analysts wrote:

"In reality, this cycle could be different. Continued daily net inflows into U.S. spot bitcoin ETFs continue to be a significant driver for this asset class. However, this does not necessarily indicate that we are over the point of us entering into a supply crisis scenario where demand exceeds supply in this market.

Although this cycle does not necessarily lead to a supply crisis. However, this highlights Bitcoin's evolution into a recognized digital asset class in traditional finance. Bitcoin Halving Process According to NiceHash Data Stay away About 34 days.