Bitcoin is experiencing various influences on its price, but few events gain as much interest as the halvings as it is now only 10 days away. Looking back, halvings have consistently sparked bull markets. Although their impact seems to be declining over time, the next halving is still expected to play a significant role in the Bitcoin market. However, several analysts believe that this halving event might bring a different trend for Bitcoin.
Institutional Investors Might Influence BTC Halving
Following Bitcoin’s 15th anniversary in January 2024, the crypto community reached a significant milestone: the approval of 11 spot bitcoin ETFs by the US Securities and Exchange Commission.
For many in the industry, this signaled a decades-long evolution of crypto assets from a niche interest among “cypherpunks” to a legitimate alternative asset class attracting attention from major asset managers worldwide.
Now, the community eagerly anticipates another major event in the upcoming weeks: the fourth Bitcoin halving. Familiar to crypto traders, previous halvings have typically triggered increased market activity, leading to price surges followed by corrective phases. However, this time might be different.
Also read: Bitcoin Halving 2024: Analysts Warn of Potential “Sell-the-News” Scenario
For the first time alongside a halving event, private wealth, family offices, and major traditional financial institutions have begun adding crypto into their investment portfolios and offerings. This marks a notable departure from previous industry norms and suggests that the aftermath of this halving will diverge from previous patterns.
In the lead-up to the three previous Bitcoin halvings, the cryptocurrency typically surged to an all-time high, followed by a subsequent price decline. However, this trend has been disrupted now by the upcoming halving. Remarkably, Bitcoin reached a price peak exceeding $70,000 just before the halving, marking the first instance of such an occurrence in its history.
Will BTC Halving Attract Demand From Institutions?
Every time Bitcoin’s supply drops because of a halving, people usually rush to buy, expecting the price to go up, just like before. This has started happening again, with Bitcoin hitting a new high recently.
But this time, it’s different because a lot of pro investors who were unsure before are now getting into the game. The market’s gotten more serious, and we might even see big investment firms and funds, like those dealing with ETFs, start really getting into crypto.
The trend is clear: big players like institutions have been grabbing more Bitcoin, with their holdings up by 13.4% from 2020 to 2021. By 2023, the excitement around institutional Bitcoin products and the potential for an ETF sparked a rally. With $2.25 billion invested in digital assets in 2023 alone, professional investors are becoming a powerful force.
This time around, the market might not see the sharp price drops after halving seen in the past, due to these investors.
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