Bitcoin Halving Event Could Lead to Steady Price Increase, Says Grayscale

According to CoinDesk, Bitcoin may experience a steady price increase following its halving event due to reduced selling pressure and growing interest in native Bitcoin-based applications. On-chain activity and fundamentals have been revitalized by Ordinals, while buying demand from spot bitcoin exchange-traded funds (ETFs) is expected to support higher prices in the future. Grayscale, a crypto asset management firm, stated in a research note last week that Bitcoin's technical fundamentals and use cases have significantly improved over the past year, making the asset stronger ahead of its historically bullish halving event compared to previous years. Researcher Michael Zhao said that despite short-term challenges in miner revenue, fundamental on-chain activity and positive market structure updates make this halving different on a fundamental level. He added that recent developments suggest Bitcoin is evolving into something even more significant. Halving is a part of the Bitcoin network's code to reduce inflationary pressure on the cryptocurrency and will cut the rewards in half for successfully mining a bitcoin block, making obtaining or mining new bitcoin much harder and historically preceding bull runs. Zhao stated that the advent of ordinal inscriptions and BRC-20 tokens had revitalized on-chain activity on Bitcoin, generating over $200 million in transaction fees for miners as of February 2024. He expects this trend to persist, bolstered by renewed developer interest and ongoing innovations on the Bitcoin blockchain. The BRC-20 standard was introduced in April to allow users to issue transferable tokens directly through the network for the first time. The tokens, called inscriptions, function on the Ordinals Protocol, which allows users to embed data on the Bitcoin blockchain by inscribing references to digital art into small Bitcoin-based transactions. The report also noted that Bitcoin's market structure looks beneficial to price post-halving, with lower rewards expected to require relatively lower buying pressure to keep prices afloat, which, with increased demand, could translate to higher prices. Spot bitcoin ETFs have amassed more than 192,000 bitcoins in holdings as of Friday since their launch nearly a month ago, attracting billions of dollars from investors looking to gain exposure to bitcoin without having to buy and store it directly.