How will the Bitcoin halving affect asset prices?

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The fourth Bitcoin (BTC) halving event is upon us: April 20, 2024Bitcoin will see its block issuance halved from 6.25 BTC per block to 3.125 BTC, which will strengthen Bitcoin’s status as an inflation-resistant currency and a viable store-of-value asset.

On a historical basis, past halvings have proven to be catalyst events that pushed the BTC price to reach new ATHs. But what are the effects of the Bitcoin halving on Ether (ETH) and other altcoins?

Here’s what could also happen for two new projects: 99Bitcoins which reached $530,000 in presale thanks to learn-to-earn and Bitcoin Minetrix at over $13 million thanks to stake-to-mine.

How the Bitcoin halving affects the cryptocurrency market

While there is no direct relationship between halving events and altcoin performance, Bitcoin’s influence and close price correlation to the broader cryptocurrency market make these events a significant opportunity for the entire industry.

Michael Zhao, cryptocurrency researcher at Grayscale Investmentsaid in a research note: “Historically, the onset of cryptocurrency bull markets has often been marked by a surge in Bitcoin ‘dominance,’ a measure of Bitcoin’s market value relative to the total cryptocurrency market. ”

Zhao added: “Typically, a Bitcoin rally precedes broader gains for other altcoins. Investors, after being buoyed by their Bitcoin profits, can venture into higher-risk cryptocurrencies in search of higher returns.”

“This dynamic was observable during the 2021-2022 bull run, a period in which Bitcoin gains were quickly followed by a significant increase in altcoin valuations,” he concluded.

However, according to Shiven Moodley, COO and Macro Strategist of 80eight Groupthe increasing institutionalization of cryptocurrency markets could result divergent market reactions post-halving compared to previous cycles.

The phases of the Bitcoin halving

According to what was analyzed by Rekt Capital on Xthere are three phases of the BTC halving in total.

1. Final pre-halving retracement

Bitcoin produced two -18% retracements prior to the halving in the span of just over a month. In mid-March, BTC fell -18% before recovering to $70,000 and now in mid-April BTC has retraced -18% again, a typical event before a halving.

Rekt Capital points out that, in 2016, this retracement was -38%: in reality this is a good opportunity to purchase BTC before the halving event.

2. Reaccumulation

The reaccumulation phase develops a few weeks before the halving and ends with a breakout several weeks after the event. Bitcoin’s objectives, continues Rekt Capital, are two: to firmly establish its low range in the reaccumulation range and then proceed slowly towards the halving.

This phase can last up to 5 months, so investors can often be frustrated by all this waiting.

3. Parabolic uptrend

Once the reaccumulation phase is over, Bitcoin enters a parabolic bullish trend (indicated in green in the diagram).

During this phase Bitcoin experiences accelerated growth in a parabolic uptrend, a phase that, on a historical basis, lasts just over a year.

Historical analysis of ETH prices after the BTC halvings

ETH did not exist during the first Bitcoin halvingwhich occurred in November 2012. During the second Bitcoin halving, in July 2016, the Ethereum blockchain was just a year old and ETH was trading in a price range of $12 to $15.

The second Bitcoin halving did not result in an immediate increase in the price of ETHas, over the next six months, ETH prices fell to a low of $5.8, while BTC prices steadily increased over the same period.

The two assets peaked approximately 18 months after the halvingwith BTC hitting a record high of over $19,000 in December 2017 and ETH hitting over $1,400 a month later in January 2017.

The price movement of BTC and ETH in the months following Bitcoin’s second halving supports a popular market theory that BTC outperforms altcoins in the early stages of cryptocurrency bull runs.

During the third Bitcoin halving, in May 2020, ETH was trading in a price range between $175 and $250. But this time, within a year, both ETH and BTC reached new record highs by May 2021.

Over the years, then, the correlation of the price of BTC with ETH has stabilized in a range between +0.9 and +0.6, indicating that the two assets tend to move in sync. In 2016, the BTC-ETH correlation had hit a low of -0.5.

It is important to note that we cannot rely solely on historical data in our attempt to predict how ETH and altcoins will react to the next halving – every market cycle is different and there are other factors that can determine market performance.

Let’s talk about the macroeconomic eventsfor example, as cryptocurrency prices underwent a sharp correction in mid-April 2024, after US inflation data reduced hopes of sharp interest rate cuts by the US Federal Reserve.

Then there is the strong geopolitical tension, with ongoing wars in the Middle East and Europe potentially fueling demand for Bitcoin as a hedge against geopolitical events. ETH and other altcoins could also benefit from this narrative, as cryptocurrencies are seen as global and decentralized assets.

Not least also a possible approval of spot ETFs on ETH it could be a big market catalyst for ETH prices in 2024. May 23, 2024 is the deadline for the US to make a decision on this.

While waiting to see what will happen, there are two pre-sales that are continuing very well and which could benefit from the halving, also because they are indirectly connected to Bitcoin: let’s talk about 99Bitcoins and Bitcoin Minetrix.

99Bitcoins: can the 99BTC token explode thanks to the halving?

99Bitcoins started as a site in 2013, under the name of BitcoinWithPayPal.comwhich it then had to modify following the lawsuit for improper use of the name brought against it by the giant PayPal.

The site has always offered learning courses on BTC and other altcoins, and now it wants to expand its boundaries with the token 99BTCon presale at the cost of $0.00101. The project focuses entirely onlearning about the crypto industrywhile at the same time allowing its investors to earn through the formula of learn-to-earn.

Users, therefore, using tutorials, learning modules and quizzesthey can earn a place on the leaderboard and, based on their ranking, also rewards in 99BTC tokens.

This ERC-20 token he did then bridging to BRC-20thus ensuring native integration with the new dApp ecosystem and Bitcoin-based projects.

Furthermore there is also the chance to get staking rewards on Ethereum, with a current APY of 3715%participate in exclusive training courses and trading webinars, access VIP groups, get discounts on products and services offered by partners, and so on.

But that’s not all, because there are also a planned airdrop, which will distribute $99,000 in BTCit’s a giveaway which will reward three participants. The project has so far reached $530,000 in pre-sales: those interested will be able to connect their wallet to the 99Bitcoins page and purchase the desired tokens with ETH, USDT, using the BNB chain or a bank card.

Thanks to the halving, this project could also see the 99BTC token explode with the listing.

Bitcoin Minetrix Surpasses $13 Million Stake-to-Mine: Can BTCMTX Explode With Halving?

Bitcoin Minetrix is the new project that indirectly connects to Bitcoin through a new way to mine: stake-to-mine. The project has exceeded quota $13.1 million and see now a BTCMTX, native token, sold for $0.0147.

To become part of the project, simply participate in the presale of the BTCMTX token by connecting your wallet to the official page and purchasing a minimum of $10 tokens, then stake them.

In this way they will mature Non-tradable ERC-20 tokensi.e. credits for mining, to be burned to obtain hashrate, computing power and the Bitcoin rewards at the end.

The cloud mining certified by Coinsult it is the way used by Bitcoin Minetrix to make its users earn rewards, with the added verification that makes it safer compared to others in circulation. In fact, users are often forced to deposit fiat money and do not receive the rewards.

Investors can also earn passive income by staking BTCMTX, with a current APY of 54%. Also, those who buy tokens in presale with ETH and pay a minimum fee of $0.015, can immediately exploit the reward mechanisms; who instead uses USDT, MATIC, the BNB chain or a bank cardyou will have to wait for the presale to end to stake and stake-to-mine.

BTCMTX has a good chance of exploding with the listing, if events such as the halving and market conditions allow it.

*This item has been paid for. Cryptonomist did not write the article or test the platform.