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How’s Crypto Looking: Market’s Response to Bitcoin Halving & Future Trajectory 

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Bitcoin Halving

Bitcoin price is enjoying a spike after having its fourth halving over the weekend. Prior to the halving, the price of Bitcoin went just under $60K to hit nearly $59,700. But ever since the event, the price has been rebounding and is now above $66,000.

At the time of writing, BTC/USD has been trading at $66,250, up 2% in the past 24 hours and 0.2% in the past week, according to CoinGecko. The price is also in green, at 2.2% in the past month and 141.3% in the past year.

It's notable that for the last two months now, Bitcoin has been trading in the $60K and $74K range. Even with the current spike, the crypto asset is well within its range.

Leading into the halving, Google searches for “Bitcoin halving” also hit an all-time high (ATH), even exceeding the search frequency for meme number “420” associated with marijuana for the first time. This has steadily increased since the beginning of the year, alongside search interest for “Bitcoin,” though the latter remains well below its 2017 peak.

Bitcoin halving has been a highly anticipated event. It occurs about every four years or 840,000 blocks. The 840,000th Bitcoin block was mined early on Saturday.

Bitcoin Block Height

Embedded in the Bitcoin blockchain's code by its pseudonymous creator, Satoshi Nakamoto, to ensure the crypto assets' scarcity, it marks the slashing of the rewards for Bitcoin miners, thereby slowing down the BTC supply into the market. As of now, Bitcoin miners get 3.135 BTC for creating blocks. 

If we take a look at history, the halvings tend to lead to a bull run to the largest cryptocurrency with a market cap of $1 trillion.

For instance, the most recent halving took place in May 2020, when BTC was trading around $9,500 and subsequently went on to hit $65,000 within the next year. Prior to that, the second halving occurred in July 2016, with the price at just $658 and then reaching its peak at $1,550 within a year. The very first Bitcoin halving happened in November 2012, when the price was $12 and surged to $135 in less than a year.

BTC Unrealized Profit Ratio

This clearly shows that after Bitcoin's halving, the entire cryptocurrency market tends to experience a period of heightened volatility and price discovery.

So, what does it mean for the BTC price this time?

Click here to learn all about investing in Bitcoin (BTC).

Is Bitcoin Halving 2024 Different?

The Bitcoin price has been enjoying a strong rally since quarter three of 2023, driven by the anticipated approval of a Bitcoin spot exchange-traded fund. 

Then, in January 2024, the US Securities and Exchange Commission (SEC) approved the first ETF, leading to the launch of nearly a dozen such products that recorded multi-billion dollars in inflows. Buoyed by this demand, on March 14th, BTC/USD made an ATH of almost $73,740.

But now, demand for the product seems “saturated,” according to Matrixport, which noted how a recent decline of 10% to 15% in prices “has not increased net inflows.”

According to data provided by the London-based investment management company Farside, on April 19th, net flow was finally positive at $59.7 million after five consecutive days of net outflows. Going by Glassnode data, Bitcoin ETFs collectively hold 851k BTC, which is about 4.3% of Bitcoin's circulating supply. 

Stagnated BTC ETF Demand

While inflows in other products have been decreasing, Grayscale's Bitcoin ETF (GBTC), however, continues to see significant outflows. GBTC now has 304,970 BTC (worth $19.6 bln) left in its Bitcoin trust, which charges the highest fees among its competitors at 1.5%. 

Interestingly, Grayscale is planning to launch a spinoff version of GBTC, Bitcoin Mini Trust, which will have the lowest fee at 0.15%. The asset manager will contribute 10% of its GBTC assets to the BTC Trust, whose shares will be issued and distributed automatically to GBTC holders.

So, the slowdown in the Bitcoin Spot ETF inflows is currently creating bearish sentiments. But this is not all.

Last week, banking giant JPMorgan analysts said the halving is “already priced in,” and they expect Bitcoin to drop following the event for several reasons, including the asset remaining in “overbought conditions.” 

This rally was fueled by the high level of open interest (OI) in Bitcoin futures, which currently stands at 474.65K BTC (worth $31.33 bln). The last significant OI, which was recorded in May 2021, was about $24 bln. However, it peaked at $36.3 bln on March 29th, as per CoinGlass. Over the last week, the drop in price wiped out lots of leverage and OI from the market. As a result, the OI fell as well, going under $29 bln last week. 

How Bullish is BTC After Bitcoin Halving?

The bank further noted that for the market to have a “sustained recovery,” the venture capital (VC) flows in the sector must make a recovery as well. As such, subdued VC flows pose a downside risk.

The latest data from capital markets data provider PitchBook, however, shows that 485 deals worth $2.5bn were made in 1Q24, a considerable increase from the 341 deals worth under $2bn made in 4Q23.   

Akin to JPMorgan, Goldman Sachs also warned its clients of a drop in BTC price, noting that, unlike the previous three halvings, this time, the crypto asset has already reached its ATH. The bearish views around Bitcoin halving are prevalent among traditional financial institutions, with Deutsche Bank also not seeing any large upward price movement in the aftermath.

New ATH Soon for BTC after Bitcoin Halving?

However, according to Thomas Perfumo, Kraken's Head of Strategy, this halving comes at a time when people are considering Bitcoin an “alternative form of currency” against the backdrop of inflation, interest rates, and the economic environment.

Click here for ten reasons to invest in Bitcoin.

Post Bitcoin Halving Miner Behavior

Another big factor is miner behavior. Following the recent halving, JP Morgan analysts expect mining companies to take a hit. While some miners may relocate to low-energy cost regions such as Latin America to improve their efficiency, others might consolidate with larger firms. 

Analysts believe that this will help rationalize the network hash rate, “which is ultimately good for the remaining operators.” On March 24th, the Bitcoin hash rate — the computation power used to process transactions — hit a peak of 727.86 Th/s and is currently at 602.82 Th/s, according to Bitinfocharts.

Analysts at cryptocurrency bank Amina meanwhile noted in a research note late last week that miners started selling their BTC ahead of the halving. According to the crypto bank:

“Currently, miner balances are near an all-time low. This comes at the back of heavy selling from miners as they scramble to take profits ahead of the halving.” 

With rewards cut down in half, some miner operations may be unprofitable, which means they are looking to shore up their balance sheets.

Will BTC Miners Remain Unscathed After Bitcoin Halving?

According to Bernstein analyst Gautam Chhugani, the market has been seeing Bitcoin mining stocks as “BTC proxies” up until now. Now that ETFs are here, the “halving would further differentiate the low-cost, high-scale consolidating winners vs. the rest of smaller miners.”

Crypto fund manager CoinShares, meanwhile, expects some miners to shift towards AI due to the sector's high revenue potential. Mining farms like Core Scientific, Hut 8, Hive, BitDigital, and Terawfulf either already have or are planning to have AI operations.

While the mining sector is expected to see the most effect of the halving in the near term in terms of closures or consolidations due to a decrease in profitability, an increase in fees may offset these losses.

Is This the Solution to the Reward Reduction Post Bitcoin Halving?

Miners receive block rewards, or subsidies, for validating transactions in each block. In addition to the block subsidy, miners also collect fees associated with the transactions within that block.

The halving block, mined by ViabTC, collected about 40 BTC worth $2.6 mln in subsidy plus fees. This represents a significant increase from the fees earned in the previous block, which amounted to about 7 BTC worth around $450K. Some speculate that this surge was due to people eager to be among the 3,050 transactions included in the halving block and willing to pay even higher fees for the privilege.

While this could be temporary, developments like Ordinals and layer2 networks can sustainably compensate for the decreased miner revenue. 

If we look at tokens related to Bitcoin L2 solutions, such as Stacks' STX, Elastos' ELA, and SatoshiVM's SAVM, they have rallied 27.5%, 25%, and 17.5%, respectively, since Friday, compared to Bitcoin's just over 8% jump during this time.

BTC L2 vs DeFi War?

With L2 solutions, the idea is to address the slow transaction speed and scalability issues of the Bitcoin blockchain by building on top of it and processing transactions off the main chain. These L2 solutions further bring programmability features to Bitcoin. 

So, the surge in L2 coins came as the Bitcoin blockchain saw a surge in its transaction fee following the halving. According to Glassnode, fees jumped to almost 0.0020, the highest since early 2018.

The average fee paid per transaction went to a record high of $128.45 on the day of halving, as per YCharts. Since then, it has come down to $34.86 on April 21st. Overall, the Bitcoin network posted $81 mln in total transaction fees, much higher than $7.7 million the day before, only to have $22.37 million on Sunday.

This surge in fees was due to the launch of the Runes protocol, a token standard akin to BRC-20. This standard brings fungible tokens to the Bitcoin blockchain and is made possible by the taproot and Ordinal protocols. Using this standard, hundreds of tokens have been launchedamassing a combined market cap of $2.79 bln. Some of the leading and popular BRC-20 tokens include ORDI, SATS, PUPS, 1000SATS, Multibits, and Rats.


Runes vs BRC-20 in the context of Bitcoin halvingAfter launching the Ordinals platform to enable NFTs on Bitcoin, Casey Rodarmor's Runes protocol has caused transaction fees to spike as people hurried to create and trade Rune-based memecoins. 

The protocol allows users to “etch and mint tokens on the Bitcoin blockchain. According to, 7,160 runes have been etched so far.

The initial excitement around runes has since fallen, though, with the runestone NFT collection's floor prices decreasing by about 50% in the last 24 hours to 0.036 BTC, as per Magic Eden.

Click here to learn what 2024 Bitcoin halving means for BTC ecosystem.

Other Big Drivers of Price

Recently, crypto price action has been severely affected by geopolitical tensions, particularly the Israel-Iran attack. Other factors have also negatively impacted Bitcoin, including US tax payments. Taxpayers often sell their stocks, funds, and crypto to raise cash, leading to a fall in asset prices.

Another factor weighing on the Bitcoin market is high inflation, which has prompted the US central bank to maintain higher interest rates for an extended period. Federal Reserve Chair Jerome Powell recently dashed any hopes for rate cuts this year, saying that monetary policy actually needs to be restrictive for longer.

Rate cuts have depended on “greater confidence that inflation is going down towards the Fed's 2% goal. However, Powell told a forum that: 

“The recent data have clearly not given us greater confidence and instead indicate that it's likely to take longer than expected to achieve that confidence.”

Why are BTC Prices Down Despite Bitcoin Halving?

Fed policymakers are expected to leave rates unchanged. The market does not expect a rate cut until September, and the chances of a second cut are fast-dwindling. According to Powell:

“If higher inflation does persist, we can maintain the current level of restriction for as long as needed. At the same time, we have significant space to ease should the labor market unexpectedly weaken.”

So, macro remains a headwind for Bitcoin, with Needham analysts expecting interest rate policy and geopolitical tensions to be the “biggest near-term drivers of crypto price action, as BTC's price above $60K has “de-risked halving for almost “all public miners.”

The current macro environment of high inflation and high rates is also different from the last time, with Goldman writing that this makes risky investments like crypto less attractive. It said:

“Caution should be taken against extrapolating the past cycles and the impact of halving, given the respective prevailing macro conditions.”


Over the past decade and a half, Bitcoin has grown tremendously and is increasingly regarded as a digital gold and a modern-day store of value.

By halving the supply of new BTC entering the market, the largest cryptocurrency can attract more retail and institutional demand. Moreover, with the introduction of innovations such as Bitcoin spot ETFs, Layer 2 solutions, new token standards, and other blockchain advancements, Bitcoin is poised for exciting times ahead.

This is of great significance as with each halving. Now, miners will rely on fees more and more. Against this backdrop, such an increase in fees, along with Bitcoin's price, will bolster miners and the network's security. However, the recent spike in fees is temporary and needs to be strong, sustainable, and robust enough to really support the Bitcoin network.

When it comes to price, Bitcoin may experience corrections in the short to medium term, presenting a wonderful opportunity for investors. However, the market is reacting positively to the halving for now. 

While legacy institutions believe this time to be different, it remains to be seen just how the next year goes. The crypto market, meanwhile, is as enthusiastic as ever, anticipating much higher prices ahead as this bull run gains momentum.  

Click here to learn if the Bitcoin halving's impact is weakening. 

Gaurav started trading cryptocurrencies in 2017 and has fallen in love with the crypto space ever since. His interest in everything crypto turned him into a writer specializing in cryptocurrencies and blockchain. Soon he found himself working with crypto companies and media outlets. He is also a big-time Batman fan.