Following the recent halving event, Bitcoin may experience a gradual increase in price due to decreased selling pressure and growing interest in Bitcoin-based applications.
According to Grayscale, Bitcoin’s technical fundamentals and use cases have significantly improved over the past year, making the asset stronger prior to the halving event. This suggests a potential shift in Bitcoin’s role from being digital gold to evolving into something even more significant.
The introduction of ordinal inscriptions and BRC-20 tokens has injected new life into Bitcoin’s on-chain activity, resulting in over $200 million in transaction fees for miners as of February 2024. This trend is expected to continue as developer interest and innovation on the Bitcoin blockchain grow.
The emergence of the BRC-20 standard has allowed users to issue transferable tokens directly through the network for the first time. These tokens, known as inscriptions, operate on the Ordinals Protocol, allowing users to embed data on the Bitcoin blockchain by inscribing references to digital art into small Bitcoin-based transactions.
Additionally, spot bitcoin exchange-traded funds (ETFs) have amassed over 192,000 bitcoins in holdings since their launch, attracting billions of dollars from investors seeking exposure to Bitcoin without directly purchasing and storing it. This increased demand is likely to drive higher prices for Bitcoin in the future.
As the block rewards decrease following the halving, the required buying pressure to maintain current prices is expected to decrease to approximately $7 billion annually. This shift in market dynamics is likely to support higher prices for Bitcoin post-halving.
Overall, the combination of improved fundamentals, growing interest in Bitcoin-based applications, and the emergence of Bitcoin ETFs point to a potentially bullish future for the cryptocurrency.
