Bitcoin Halving: The Biggest Crypto Event of the Year

Investors in the cryptocurrency market are eagerly anticipating the Bitcoin halving, but critics caution against speculative short-term price increases.

On Friday, 19 April, investors were keyed up for the Bitcoin halving, an event that involves a technological change designed to reduce the rate at which new Bitcoins are created. “This is set to be one of the largest events in the crypto space this year,” said Chris Gannatti from WisdomTree, a company that manages exchange-traded Bitcoin funds. For crypto enthusiasts, this quadrennial event restricts the supply of a coveted asset, thereby enhancing its value. Critics, however, describe it as a mere technical change that speculators exaggerate to boost prices temporarily.

Anticipating Increased Volatility
“The halving itself is likely to be quite unremarkable since the event is largely priced in,” commented Timo Emden from Emden Research. However, he advised that market participants should prepare for increased volatility in the upcoming weeks. The ongoing conflict in the Middle East remains a risk factor.

Just hours before the anticipated halving, the world’s largest cryptocurrency was up by 1.5 percent at $64,459. Fears of escalation in the Middle East had briefly pushed Bitcoin below the psychologically significant $60,000 mark overnight. According to insiders, Israel had launched an attack on Iran just days after a drone strike by Iran on Israel.

Markets in Safety Mode
“I believe the markets are currently in a flight-to-safety mode,” said Moh Siong Sim, a currency strategist at the Bank of Singapore. “At this point, we are aware that something has happened, but we need to understand the extent of the retaliatory measures.” Risky asset classes such as cryptocurrencies continue to be gripped by geopolitical uncertainties, noted Emden. “Anything associated with risk tends to be shunned at such times.”