Bitcoin Cash Halving Completed; Market Impact Uncertain

Bitcoin Cash (BCH) underwent its second halving on April 4, 2024, reducing miner rewards from 6.25 BCH to 3.125 BCH per block. BCH initially dropped 9% before halving but rebounded over 5% immediately after. While Bitcoin's halving is anticipated on April 20, its impact is expected to be milder due to the diminishing effect of halvings over time, the launch of Spot Bitcoin ETFs, and large trading volumes.

Bitcoin Cash Completes Second Halving, Impact on Crypto Market Uncertain

April 5, 2024 - Bitcoin Cash (BCH) has successfully undergone its second halving event, reducing the block reward for miners from 6.25 BCH to 3.125 BCH. The halving occurred on April 4, 2024, at block height 840,000.

In the lead-up to the halving, BCH experienced a bullish trend, with its price rising by over 15% in the past week and 33% in the past month. However, the price dipped by approximately 9% in the hours preceding the halving.

Immediately following the halving, BCH's price rebounded by more than 5%. However, it has since retraced, trading at $613.88 as of press time, marking a 2.53% decline in the past 24 hours.

Analysts believe that the halving could have a significant impact on the crypto market, although the extent of its influence remains uncertain. Historically, Bitcoin halvings have been associated with price surges. After the first halving in 2012, Bitcoin's price skyrocketed by over 5,500% within four years. Following the second halving in 2016, the price increase was less pronounced, with a gain of approximately 1,250%.

However, some analysts believe that the impact of halvings has gradually diminished over time. In the current cycle, the price of Bitcoin (BTC) has only increased by approximately 700% since the previous halving. This suggests that the potential for a major surge in BTC's price after the upcoming halving may be limited.

Furthermore, the recent launch of the spot Bitcoin exchange-traded fund (ETF) and its substantial trading volume could potentially mitigate the effects of the halving. Spot ETFs provide investors with exposure to the underlying asset without the need to purchase or hold the physical asset. This could increase demand for Bitcoin, offsetting the supply reduction caused by the halving.

"The approval of spot ETFs is going to be a major catalyst that's going to drive the demand shock, and then that will be followed in April with a supply shock," said Michael Saylor, CEO of MicroStrategy.

Overall, the impact of the Bitcoin Cash halving and the upcoming Bitcoin halving on the crypto market remains uncertain. While historical trends suggest that halvings can trigger price surges, the diminished impact of recent halvings and the introduction of spot ETFs may modify their effects.