Source: Daoshuo Blockchain
At the end of April this year, Bitcoin will enter a new halving. After this halving, the reward for each Bitcoin block will change from 6.25 Bitcoins to 3.125 Bitcoins.
The halving has always been a very important and iconic event for the crypto ecosystem. As a major player in the crypto ecosystem, Grayscale recently published an article on this halving "2024 Halving: This Time It's Actually Different》---The halving in 2024 will be different this time.
In this article, Grayscale interprets the upcoming halving from four angles: the possible impact on supply, the role of miners, continued on-chain activities, and the impact of Bitcoin ETFs on market impact.
The article’s interpretation of all these angles will ultimately converge to one basic question: What impact will they have on the future trend of Bitcoin prices?
As for the possible impact on supply, the article mainly mentioned that each halving of block rewards will further increase the scarcity of Bitcoin.
For this "scarcity", I think it still depends on the angle from which it is viewed.
If we look at the new increment, it has indeed decreased. But if we look at the circulation, as long as Bitcoin still has block rewards, its circulation will continue to increase.
This is different between Bitcoin and Ethereum: because Ethereum is destroyed, the circulation of Ethereum may deflate as on-chain activity increases. So I think the deflationary effect of Ethereum will truly create "scarcity".
The "scarcity" brought about by Bitcoin halving is more of an emotional reaction. I think even if it has an impact on the price of Bitcoin, it is only an emotional impact, not a substantial mechanical impact.
As for the role of miners, the article mainly mentioned two challenges faced by miners: one is that mining costs are constantly rising, and the other is that the income from block rewards is constantly decreasing.
In order to deal with these two challenges, in addition to selling the Bitcoins obtained from mining, miners may even sell their inventory. The article mentioned that as early as the fourth quarter of last year, miners began to sell off inventory in exchange for funds to cope with the upcoming halving this year.
It is worth noting that with the rise of the Bitcoin Inscription ecosystem in 2023, Bitcoin’s on-chain activities have greatly increased, which has brought considerable income to miners.
The article lists three data worthy of attention:
First, on November 20 last year, the transaction fees on the Bitcoin chain exceeded Ethereum for the first time.
Secondly, since the emergence of the inscription ecology, more than 20% of miners’ income comes from inscription-related activities.
Third, in November and December last year, in the field of NFT transactions, Bitcoin surpassed Ethereum and became the leader in NFT transactions.
The direct consequences of these data on the Bitcoin ecosystem may be as follows:
First of all, the challenges faced by miners in terms of income will be greatly alleviated. In the long run, this will stabilize the income of miners and ensure the security of the Bitcoin network.
In addition, it can be speculated that in the later stages of the bull market, which is approaching its climax, when the NFT ecosystem is detonated, NFTs in the Bitcoin Inscription ecosystem are expected to see an astonishing transaction volume. By then, the price of the leading NFT in the Bitcoin Inscription ecosystem is expected to be quite a bubble.
Finally, the article expresses an extremely optimistic attitude towards the adoption of Bitcoin ETF, believing that it will directly attract the attention of three types of people: investors, financial advisors and capital market allocators, which will ultimately greatly Promote the adoption and recognition of Bitcoin by the mainstream market.
The article lists a noteworthy data: the inflow of funds within 15 days after the adoption of the ETF has digested the possible selling pressure on Bitcoin within three months after the upcoming halving. Therefore, the article is optimistic that the adoption of ETF will well digest the pressure caused by miners' selling.
In general, this article by Grayscale lists the unique advantages of Bitcoin’s halving compared to previous halvings, and believes that these advantages will have a long-term impact on Bitcoin’s subsequent rise. of support.
I once believed in an earlier article that it is possible for the price of Bitcoin to reach $100,000 in the next bull market. At that time, Bitcoin did not have an inscription ecosystem. Now, the Bitcoin ecosystem has begun to take shape, and there is support from external funds, so I am now optimistic about Bitcoin exceeding $100,000 in the bull market.
JinseFinance
Cointelegraph