- Grayscale Investments published a forecast for the Bitcoin market after halving.
- They are confident of further growth in the price of the asset against the backdrop of two main factors – the popularization of Ordinals and the approval of spot ETFs.
The next halving, expected in April 2024, is “different at a fundamental level,” Grayscale Investments said in a report. The approval of spot Bitcoin ETFs and the popularization of Ordinals have changed the structure of this market, experts believe.
The study indicates that miners will indeed suffer losses in the short term. However, in the long term, the halving will likely lead to higher prices due to a number of factors.
“There is evidence that miners have been preparing for the financial consequences of the halving for a long time. In the fourth quarter of 2023, there was a trend towards the sale of bitcoins by these counterparties,” the report says. “This and other measures, including the issuance of shares, suggest that participants in this market are ready to meet the challenges ahead.”
According to Grayscale Investments experts, even if some counterparties leave, the hashrate drawdown will adjust the cost of cryptocurrency production, thereby reducing costs for other companies.
Let us remember that at the end of 2023 the hashrate reached an ATH of 544 EH/s. Later, the figure fell due to abnormal cold in the state of Texas, where a significant part of the mining centers in the United States is concentrated.
Changing market structure
Halvings are often accompanied by selling pressure, the report says. However, the approval of spot Bitcoin ETFs and increased demand for Ordinals may reduce the impact of this factor on the price of the asset, experts believe.
The popularization of Bitcoin NFTs has led to a surge in fees on the network. The report indicates that in February 2024 alone, miners received about $200 million in royalties.
Spot Bitcoin ETFs, in turn, can provide the necessary buying pressure, experts say:
“To maintain current price levels, there would need to be corresponding buying pressure of $14 billion per year, with an average price tag of $43,000 per coin. After the halving, this amount will be halved.”
These exchange-traded funds open up access to Bitcoin to the general public, the report says. At the same time, the net inflow of capital in this segment has already exceeded $1.5 billion.