There has been another Bitcoin halving, the fourth to date, and this one has been unlike any other, as institutional investment has played a key role for the first time.
Bitcoin halvings have historically been associated with one essential similarity: a subsequent rise in the price of BTC, often occurring some time after the halving.
While the community has yet to find out if the fourth halving will follow the same path, some things are already different about the 2024 Bitcoin halving.
Cryptocurrency user base has increased by at least 400% since the 2020 halving
Although the speed of generating new Bitcoin has slowed since the first halving, demand has not stood still.
Since the previous Bitcoin halving, which took place in May 2020, the global cryptocurrency user base has added at least 400 million users, according to various sources.
In 2020, the number of cryptocurrency owners worldwide was around 100 million users, according to estimates by the Cambridge Center for Alternative Finance (CCAF). By the end of 2023, the number of global cryptocurrency users will reach 580 million people, according to estimates by cryptocurrency exchange Crypto.com.
Even though Bitcoin is the world’s largest cryptocurrency by market capitalization and the oldest, it apparently has fewer users than the entire cryptocurrency ecosystem.
According to data from Technopedia, it is estimated that approximately 2.7% of the world’s population will own Bitcoin in 2024, which translates to about 219 million people. If true, the estimated figure is 208% higher than the 71 million Bitcoin users four years ago, according to Crypto.com calculations.
With Bitcoin or most other cryptocurrencies, most user count estimates cannot be 100% accurate, as on-chain transaction analysis is often unable to differentiate between long-term holders and BTC. lost, as well as other factors.
A Bitcoin rally prior to 2024 has not been seen before
One of the biggest differences between Bitcoin’s fourth halving and the previous three halvings is that the price has seen extraordinary growth ahead of the 2024 halving.
In previous cycles, Bitcoin price recorded breakouts after the halving rather than before, with new all-time highs occurring about a year after the date of this event.
For example, Bitcoin did not surpass the $20,000 ATH previously set before the 2020 halving. In that cycle, the price of Bitcoin only crossed the ATH 10 months later. The panorama is very different this time.
In the current cycle, Bitcoin hit all-time highs just before the event, setting a record high of $73,600 on March 13, 2024.
This breakout has never been seen before, and many analysts agree, including eToro cryptocurrency analyst Simon Peters.
Miners are “in better shape” for the halving this time
The unprecedented rise in Bitcoin price before the halving has potentially had a positive impact on the mining industry, as miners have gained greater control over mining costs.
“Compared to the previous halving, it appears that miners are in better shape overall in terms of lower levels of debt and potentially better control over their costs, such as electricity,” Chris Kuiper, director of research at Cointelegraph, told Cointelegraph. Fidelity Digital Assets:
“What is also helping miners in this cycle is the price appreciation before the halving, something that has also not been seen in previous cycles.”
Since the third halving in May 2020, Bitcoin mining power consumption has increased significantly, rising from around 50 Terawatt hours (Twh) to 99 Twh on April 18, 2024.
At the same time, the amount of Bitcoin network energy consumption powered by renewable energy sources has also increased, and renewables will account for 54.5% of BTC mining consumption in January 2024, according to the Bitcoin ESG Forecast.
In September 2020, this figure stood at 39%, according to CCAF data.
First Bitcoin Half with BTC Spot ETF in US
One of the simplest things about Bitcoin halving 2024 is that this halving is the first in history with BTC exchange-traded funds (ETFs) enabled in the United States.
After many years of efforts, Bitcoin spot ETFs debuted in January 2024, opening exposure to Bitcoin to institutional investors.
According to Bloomberg ETF analyst Eric Balchunas, spot Bitcoin ETFs have seen “runaway success,” apparently reflecting a rebound in demand for Bitcoin.
Since the first day of trading, the ten Bitcoin Spot ETFs combined have increased their holdings by at least 220,000 BTC, which is equivalent to about $14 billion at the time of writing.
BlackRock’s Bitcoin Spot ETF has attracted the most inflows among the 10 BTC ETFs, with its holdings rising more than 10,000%, from just 2,621 BTC in trading debut to 273,140 BTC on April 18.
Stefan Kimmel, CEO of M2, stated:
Looking at the bigger picture, while the halving draws attention, we are aware that it is only one part of a larger narrative. The confluence of ETFs, quantitative easing and halving will define the future contours of the market.
Bitcoin became more decentralized and secure globally
Bitcoin has also improved significantly in terms of network security and decentralization. Since 2020, when most new Bitcoin was mined in mainland China, Bitcoin has become a more distributed network.
Just four years ago, Bitcoin mining in China amounted to almost 80% of the total global Bitcoin mining hash rate. In February 2024, the largest Bitcoin mining countries will be the United States, with 40% of the total hashrate, as well as China and Russia, with 15% and 12%, respectively, according to Hashlab Mining founder Jaran Mellerud.
“This geographic decentralization continues as miners migrate to Africa and Latin America to take advantage of cheaper electricity prices,” says Mellerud.
Additionally, the Bitcoin blockchain has become more resistant to attacks, as its hash rate has increased five-fold since the halving.
“Five times more computing power and associated power supply, electrical infrastructure and mining hardware are now needed to attack the network,” said the founder of Hashlab Mining.
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