Explosive Growth in Crypto User Base
Since the 2020 halving, the global cryptocurrency user base has increased dramatically, surging by approximately 400%. Initial estimates placed the number of crypto users around 100 million, but by the end of 2023, this number had skyrocketed to nearly 580 million. This significant increase not only reflects wider acceptance and adoption of cryptocurrencies but also sets a vibrant stage for Bitcoin’s increased demand and market dynamics.
Pre-Halving Price Rally Unlike Any Before
Contrary to previous cycles where significant price increases occurred post-halving, the 2024 event was prefaced by a substantial price rally. Bitcoin reached a new all-time high of $73,600 on March 13, 2024, showcasing market maturity and anticipation of the halving effects well before the actual event. This unique pre-halving surge could signify a more predictive and responsive market behavior than seen in earlier cycles.
Bitcoin energy consumption. Source: Digiconomist
Miners Enter Halving in a Stronger Financial Position
The mining sector has shown resilience and strategic adaptation as miners entered this halving cycle in a healthier financial state compared to past events. Enhanced control over operational costs, such as electricity, combined with the benefits of pre-halving price appreciation, has provided a more stable foundation for mining operations. Furthermore, the shift towards sustainable energy sources continues, with a significant portion of mining now powered by renewable energy.
First Halving with Spot Bitcoin ETFs in the U.S.
This halving is the first to be conducted in the presence of spot Bitcoin ETFs in the United States, a monumental change in the investment landscape. Launched in January 2024, these ETFs have opened the floodgates to institutional investors, fundamentally altering the demand dynamics for Bitcoin. The introduction of these financial products has not only increased Bitcoin’s liquidity but also solidified its legitimacy as a mainstream financial asset.
Enhanced Network Security and Decentralization
Since 2020, Bitcoin has seen substantial improvements in network security and has become significantly more decentralized. The geographical distribution of mining activities is now more spread out, reducing the concentration of hash power and enhancing the network’s resilience against attacks. This decentralization is crucial for the overall stability and security of the Bitcoin network.
It’s like BlackRock has over 1,000 ETFs globally and $IBIT (0.1% of their total product line) accounts for 24% of their net flows YTD, oh and it just launched. IMO it would be weird not to be mesmerized by that and cover all angles.
— Eric Balchunas (@EricBalchunas) April 19, 2024
