A recent analysis by CryptoQuant suggests that the Bitcoin Halving Effectiveness Fades day-by-day. Price impact of the Bitcoin halving might not be as great as many investors had anticipated. The halving’s diminishing effect is explained by the fact that fewer Bitcoins are being issued in relation to long-term holders’ sales activity.
Rather, the main factor impacting the price of Bitcoin after its halving will probably be the surge in demand from whales who own substantial holdings of the cryptocurrencycurrency, especially those with between 1,000 and 10,000 units. Whales’ demand has been rising gradually, which could be a factor in Bitcoin’s upward price trend.
When Bitcoin’s supply was halved in the past, demand outpaced the supply reduction, which led to an increase in price. However, there were moments between 2021 and 2023 when long-term holders’ demand outpaced the amount of fresh inventory coming onto the market.
The fact that supply and demand are now much more divergent suggests that the price impact of the halving may not have been as great as previously.
Present-day holders are currently amassing almost seven times as much Bitcoin each month as is being issued in the first place.
“Permanent holders are significantly outpacing the ~28K Bitcoin issuance by adding up to 200K Bitcoin each month to their accounts. After the halving, the monthly issue of Bitcoin will drop to about 14,000, according to CryptoQuant.
Furthermore, compared to earlier Bitcoin halving events, the total amount of Bitcoin issued has dropped to just 4% of the overall supply. Issuance made up 69%, 27%, and 10% of the total supply prior to the first, second, and third halvings, respectively.
