Market update

Cointree Crypto Market Update - March 20th 2024

Market report for traders

🔮 BTC and altcoins

Over the last 7 days, Bitcoin ends at AU$95,006, dropping -15.84% at the time of writing. Meanwhile, Ethereum follows this downtrend with AU$4,860, falling -22.52% week-on-week. Altcoin are also feeling the market hit, Avalanche down -6.12%, Cardano -24.22%, and Dogecoin -25.62%.

🗞 What’s happening in the news?

As we edge closer to an event set to redefine Bitcoin, the anticipation within the crypto community is high.

Dubbed the "Bitcoin Halving" this event is a pivotal moment that could sway the fortunes of investors and miners alike. Scheduled approximately 31 days from now, around April 19, the Bitcoin network will undergo its much-anticipated halving event. This process, occurring every four years, will slash the daily supply of new Bitcoin minted by 50%. Historically, such events have sparked significant bullish momentum in the market. With past halvings propelling prices upwards by staggering percentages, the question on every investor's mind is: Will history repeat itself?

The halving cuts the block reward given to miners for processing transactions in half. Originally set at 50 bitcoins, this reward diminishes over time, making Bitcoin increasingly scarce. Analysts highlight the forthcoming reduction in Bitcoin's inflation rate from 1.8% to a mere 0.85%, underscoring the cryptocurrency's rarity and potential value appreciation. This scarcity serves as a crucial reminder of Bitcoin’s unique value proposition in the digital age.

For Bitcoin miners, the halving is a "Show Me the Money" moment. Faced with the prospect of reduced rewards, miners are scrambling to adapt by investing in more efficient mining rigs and exploring cost-cutting strategies. The shift to more powerful and energy-efficient machines is crucial for maintaining profitability in a landscape where rewards are halved but operational costs remain constant. Beyond technological upgrades, miners are also exploring creative solutions such as mine pooling and seeking cheaper energy sources to mitigate the impact of the halving on their operations.

As the halving approaches, the crypto market is witnessing a mix of anticipation and volatility. Recent liquidations and outflows have led to a temporary dip in Bitcoin's price, shedding 9.2% and trading 15% below its all-time high. Such movements are reminiscent of the market's sensitivity to both real-world factors and the speculative nature of crypto. However, the pre-event period often sees a surge in Bitcoin's price, driven by miners withholding supply and investors eagerly anticipating the post-halving bull run.

Interestingly, the mainstream acceptance and institutional interest in cryptocurrencies continue to grow, as evidenced by the world's largest pension fund, Japan's Government Pension Investment Fund (GPIF), exploring Bitcoin as a potential diversification tool. This shift towards digital currencies is being seen across the world, shaping traditional finance and highlighting the viability of crypto as an investment.

In essence, the upcoming Bitcoin halving affects price trends, mining profitability, and broader market dynamics. As we countdown to this momentous occasion, it's clear that the only constant in the crypto landscape is change - for better or for worse.

📖 What we’ve been reading

Why is Ethereum (ETH) price down today?

“Ether price is down today as Bitcoin’s sharper-than-expected sell-off shakes the entire crypto market.”

Read more

FTX victims describe ‘irreparable harm’ ahead of Sam Bankman-Fried’s sentencing

“Judge Lewis Kaplan could potentially sentence the former FTX CEO to decades in prison on March 28 following his November 2023 conviction.”

Read more

The Bitcoin Halving Really Is Different This Time

“Four ways this April’s big event will be unprecedented.”

Read more

Disclaimer: The information provided is for educational purposes and does not constitute financial product advice. You should obtain independent advice from an Australian financial services licensee before making any financial decisions.

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