Bitcoin Could See a Stable Rise Following the Halving Event

Bitcoin ETFs managed to gather over 192,000 bitcoins in holdings since their launch a month ago until last Friday. The cryptocurrency’s technical fundamentals as well as use cases have grown exponentially in the past year. This made Bitcoin’s asset much “stronger” ahead of its historical event of bullish halving.

The halving event is part of the network’s code as a way to reduce inflationary pressure on the cryptocurrency. It will also cut the rewards in half for all those who successfully mine a Bitcoin block. This is something that makes mining or obtaining new Bitcoin (BTC) much harder.

Researcher’s Analysis on Bitcoin’s Tokens

A cryptocurrency researcher Michael Zhao had his say on this Bitcoin event. He thinks that the positive market structure updates and fundamental on-chain activity are making the halving event different on a basic level. This statement comes despite the miners’ revenue challenges in the short term.

Zhao also gave his thoughts on the BRC-20 tokens. They stated that the advent of ordinal inscriptions and these tokens had strengthened the on-chain affairs of Bitcoin.

As of February 2024, it generated over $200 million in transfer fees for the miners. He added that he expects this trend to persist, supported by ongoing innovations on the Bitcoin blockchain and renewed developer interest.

This BRC-20 standard came out in April 2023 and it stands for Bitcoin Request for Comment. It allows users to issue transferable coins directly via the network, something that wasn’t possible before.

These tokens, also known as inscriptions, work on the Ordinals Protocol. Now, this protocol gives users a chance to place data on the Bitcoin blockchain. They can do that by writing digital art references into tiny Bitcoin-based transactions.

The fees that came from the Ordinals consisted of more than 20% of the miners’ monthly revenue. This was during the ties of the network demand, which emerged as a new source of income. It became one the the network’s biggest stakeholders.

Bitcoin ETFs Are Set to Fuel the Buying Pressure

Reports indicate that Bitcoin’s market structure seems beneficial to price after the halving event. This is of course beyond the generally positive on-chain fundamentals.

With the lower rewards, experts believe that it will require relatively lower buying pressure in order to keep the prices afloat. This will also increase the tokens’ demand, which also means higher prices.

On this topic, Zhao analyzed the history of such events. He stated that the block rewards are introducing potential sell pressure to the market. This gives the possibility for all newly mined tokens to sell on the market, which will significantly impact the prices.

At the moment, miners are mining 6.26 Bitcoins per block, which makes out to around $14 billion annually, according to today’s price. Zhao believes that the cryptocurrency needs an annual corresponding buy pressure of $14 billion in order to maintain current prices.

He then added that these requirements would be lowered to $7 billion annually. This will happen when the halving as rewards decrease to 3.25 bitcoin per block, which will effectively relieve the selling pressure.