“This Bitcoin halving is different from the last time” Grayscale analysis


Bitcoin ETF approval and halving
On the 9th, US crypto asset (virtual currency) management company Grayscale released a report on the Bitcoin (BTC) halving. Points that differ from the previous halving include the approval of spot ETFs and the rise of Ordinal.
Grayscale points out that in the past, Bitcoin has increased in price after halving, but those price increases may have been related to macroeconomic conditions. We hold that this suggests that the price of Bitcoin is not only influenced by the halving, but also by broader economic conditions and investor behavior.
Based on that, we will analyze the impact that the halving will have on the supply of Bitcoin. First, we analyzed the Bitcoin spot ETF as follows.

Assuming that the Bitcoin ecosystem continues to spread and mature and that stable capital inflows continue, ETF capital flows may function as an offset to mining operators’ selling pressure.

We assume that daily inflows into ETFs are in the range of $1 million to $10 million (approximately 150 million yen to 1.5 billion yen), and if it is in the $10 million range, we assume that there will be a decrease in selling pressure. The net inflow on the 8th was $400 million.

Cointucky Derby Update. BIG net inflow day of over $400 mln. With almost 8 of the newborn nine took in money yesterday. $FBTC officially crossed $3 billion in AUM. $GBTC outflow streak continues with -$101.6 mln out pic.twitter.com/4RX4RsVxki
— James Seyffart (@JSeyff) February 9, 2024
Relatedly, it was pointed out that the sale of block rewards by mining operators has become a potential selling pressure. Currently, the reward is 6.25 BTC per block, but after the halving, it will be 3.125 BTC. This currently equates to an annual decline of $7 billion (approximately 1 trillion yen), which we predict will ease selling pressure.
connection:
Learn about Bitcoin ETFs from the beginning: Explaining the advantages and disadvantages of investing and how to buy US stocks

What is half-life?
It refers to the timing when the mining reward (= new issuance amount) of virtual currencies such as Bitcoin is reduced by half. Many virtual currencies have an “issuance limit” set in order to prevent inflation, and the amount of new issuance is reduced by half at each halving period that occurs at a certain period. It is also a noteworthy event unique to virtual currencies, as the scarcity value increases significantly as the supply decreases, making it easier for prices to soar.
Virtual currency glossary

Possibility of Ordinal helping Miner
Grayscale points out that with regard to the reduction in rewards that miners receive due to the halving, Bitcoin-based NFTs such as Ordinals, which are sometimes called NFTs, may help miners through network transaction fees. did.
Ordinal is a protocol that creates persistent digital assets by associating images, videos, text, etc. on the Bitcoin blockchain.
connection : What is the current status of Bitcoin Ordinal and its competitors, which continue to attract investor interest, and the BTC ecosystem?
Grayscale notes that transaction fees from Ordinal already account for about 20% of overall miner revenue. At this time, he said, the new trend of ordinal-related activities presents a new path to maintaining network security through increased transaction fees.
However, it points out that there are scalability issues as users may end up paying high transaction fees due to the increase in transaction volume. He cited the development of layer 2 networks (Stacks, Merlin Chain, etc.) as a solution to this problem.
connection : Revitalizing Bitcoin L2 development, will it lead to rapid growth of the ecosystem?

Half-life special feature

We have introduced the “Heat Map” function to the CoinPost app for investors! In addition to important news about virtual currencies, you can also see at a glance exchange information such as the dollar yen and price movements of crypto asset-related stocks in the stock market such as Coinbase.
■Click here to download the iOS and Android versions https://t.co/9g8XugH5JJ pic.twitter.com/bpSk57VDrU
— CoinPost (virtual currency media) (@coin_post) December 21, 2023
nhttps://imgs.coinpost-ext.com/uploads/2023/12/grayscale-etf-bitcoin.png –>

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