How to Prepare for Bitcoin Halving in April 2024: Expert Tips & Projections

How to Prepare for Bitcoin Halving in April 2024: Expert Tips & Projections

Bitcoin halving is the most anticipated event of the crypto industry that occurs once every four years. According to the Bitcoin halving countdown, April 18, 2024, is the date when Bitcoin is expected to mint its 840,000 block and subsequently undergo its fourth halving.

From an investor’s perspective, halvings are seen as milestone events that have ushered crypto bull markets. For miners, halvings bring challenging business conditions where miner revenues are cut by half and production costs per Bitcoin theoretically double.

In this article, we conduct an in-depth Bitcoin halving analysis, as well as provide potential post-halving price scenarios and tips for both investors and miners from industry experts on how to prepare for the fourth Bitcoin halving cycle.

Key Takeaways

  • Bitcoin is expected to undergo its fourth halving on April 18, 2024.
  • Historical charts showed Bitcoin prices took between 12 to 18 months to peak post-halving.
  • The introduction of spot BTC ETFs has created unprecedented market conditions.
  • Graeme Moore, the head of tokenization at Polymesh Association, predicted that the price of BTC could go as high as $100,000 past halving in 2024.
  • Anndy Lian, an intergovernmental blockchain expert, predicted that the BTC price post-halving has the potential to surge 10% higher than its all-time high, which currently surpasses $73,000.
  • With more funds flowing into BTC ETFs, Lian added, the BTC price could go up an additional 30% by the end of the next quarter.
  • Yuya Hasegawa, an analyst at the crypto exchange Bitbank, expected a strong rally during the latter half of this year.

How to Prepare for the Next Bitcoin Halving

Tips for Investors

The crypto market is unpredictable, but that shouldn’t keep investors from learning about historical patterns and possible outcomes to stay ahead of the curve.

Here is how investors can prepare for the Bitcoin halving event.

1. No Near-Term BTC Price Increase Guaranteed

Financial markets are forward-looking. Trades are made based on the potential of future returns. Therefore, it may come as no surprise that investors have been accumulating Bitcoin since the fourth quarter of 2023 in preparation for Bitcoin’s fourth halving, having seen BTC prices surge in past halving cycles.

As of March 13, 2024, Bitcoin prices have gained over 70% year-to-date and hit new all-time highs of over $73,000 without seeing a significant correction in the first three months of 2024.

Given the predictable and anticipated nature of halving events, you should keep in mind that rational investors are most likely to buy Bitcoins ahead of the event.

Therefore, the Bitcoin halving event does not guarantee an immediate uptick in Bitcoin prices. We could even see a sell-the-news event as euphoria around Bitcoin halving fades away.

2. Positive Long-Term Impact of Halving

Over the mid-to-long term, halving is expected to have a positive impact on the price of Bitcoin due to the reduction of BTC supply. Supporting this theory is the historical market data that showed that Bitcoin prices surged astronomically over the next 18-month period following past halving cycles.

  • According to Fidelity Asset Management, Bitcoin prices surged as much as 10,485% within 371 days after the first Bitcoin halving.
  • Following the second halving in July 2016, Bitcoin prices rose as much as 3,103% over the next 525 days.
  • Similarly, after the third halving period in May 2020, Bitcoin prices jumped as much as 707% within the next 546 days.

3. Impact of Spot BTC ETFs

The introduction of spot BTC ETFs has created unprecedented market conditions that halving cycles of the past did not encounter.

Since the spot BTC ETFs were approved on January 11, 2024, the popularity of the instrument has created a Bitcoin demand shock.

For reference, the average BTC daily demand on ETF trading days currently stands at 4500 Bitcoins surpassing an average of 921 new Bitcoins minted per day, Coinshares reported.

If the spot BTC ETF remains consistent when the supply of Bitcoins reduces by 50% post-halving, the supply-demand principles of economics tell us that Bitcoin prices might rise.

Tips for Miners

One of the biggest challenges that the BTC halving event poses for miners is the reduction in mining rewards.

Apart from the 50% cut, the halving might also increase competition, heightening mining difficulty and potentially increasing the price of transaction fees.

Yuya Hasegawa, an analyst at the crypto exchange Bitbank, told Techopedia in a note that miners often have to consider how they will manage to operate with 50% less revenue.

“This has affected Bitcoin’s hash rate and the network’s difficulty post-halving, as some of them halt operation until the difficulty drops low enough for them to make a profit again. Some others sell their Bitcoin holdings to make up for decreased cash flow.”

However, Hasegawa added that miners should also consider the release of spot BTC ETFs, which could make the situation a little different.

This is because spot BTC ETFs are buying more than they can produce almost every day, thus overwhelming the BTC supply.

“If the ETF inflow continues to overwhelm Bitcoin’s supply, which it probably will since it already is buying more than the network can produce in a day even before halving, the price may continue to rise post-halving, and that could maintain mining profitability.”

Moreover, miners should also prioritize energy efficiency as the cost of electricity is a major component of mining expenses, Anndy Lian, an intergovernmental blockchain expert and the author of NFT: From Zero to Hero, explained.

This can be done through the use of efficient hardware and access to low-cost energy sources, which can help maintain profitability post-halving.

Lian told Techopedia:

“In the past, most miners looked at standard operation costs. I hope they will do more research and stay informed about market behaviors and trends to make educated decisions regarding their operations. They should evaluate their financial health, including debt levels and capital reserves, to withstand potential revenue drops due to the halving. This would also give them a gauge on how fast they expand.”

Bitcoin Price Scenarios to Consider With Approaching BTC Halving Event

Post-Halving Bitcoin Price Action: Analyst Views

Historically, BTC halving events led to the cryptocurrency’s price increases due to the reduced supply of new Bitcoin tokens entering the market.

Lian predicted that the BTC price post-halving has the potential to surge 10% higher than its all-time high, which currently surpasses $73,000.

However, he added that post-halving and with more funds flowing into BTC ETFs, the BTC price could go up an additional 30% by the end of the next quarter.

“It’s also worth noting that predictions vary widely, and the actual outcome will depend on a multitude of factors, including market demand, investor sentiment, and broader economic conditions. Always remember that investing in cryptocurrencies carries risk, and prices can be highly volatile. It’s advisable to conduct thorough research and consider seeking advice from financial experts before making investment decisions,” Lian added.

The launch of spot BTC ETFs earlier this year was a huge success, and their demand could grow even bigger later in the year, according to Hasegawa.

He added that while the Federal Reserve is still waiting for inflation to calm down, there is a possibility they could start cutting rates, which could increase demand for both BTC and ETFs and facilitate more cash flow.

Bitbank’s Hasegawa concluded:

“Furthermore, halving will crunch Bitcoin’s supply, so we could expect that those three elements (rate cuts, ETFs, halving) will together create a strong rally sometime during the latter half of this year.”

Graeme Moore, the head of tokenization at Polymesh Association, predicted that the price of BTC could go as high as $100,000 past-halving in 2024 as the cryptocurrency is already experiencing massive heights.

“We are already seeing the effect of the upcoming halving with a 50% increase in price since February. Bitcoin is now over $72K. In addition, the relentless bid from the new Bitcoin ETFs is proving that the broader market is beginning to see the value in a global, decentralized, provably scarce asset. If the previous cycles are an indicator, the price of Bitcoin will continue to rally into the halving and after.”

Historical Bitcoin Halving Analysis

A study of historical Bitcoin halving charts showed that BTC consistently saw price increases in the weeks ahead of halving events. Following halving events, Bitcoin showed a tendency to trade within a range in the next months.

Following the second Bitcoin halving, BTC price traded range bound between $600 and $800 from July 2016 to November 2016.

Similarly, following the third Bitcoin halving cycle in May 2020, BTC traded in the $8,000-$14,000 range for the next six months before finally breaking out to scale new all-time highs.

Historical charts also showed that Bitcoin prices took between 12 months to 18 months to hit the peak price during the first three halving cycles.

Market catalysts that supported Bitcoin prices during each cycle included the European debt crisis of 2009-2012, the initial coin offering (ICO) boom of 2016, and ultra-low interest rates of the post-pandemic era.

The Bottom Line

The upcoming BTC halving is poised to impact both investors and miners. While historical data suggests a potential for long-term price increases, short-term volatility and uncertainty remain prevalent.

Investors should exercise caution, considering the unpredictability of market reactions post-halving, and conduct thorough research before making investment decisions.

Miners facing reduced rewards and heightened competition must prioritize efficiency and strategic planning to navigate the challenges ahead.

As the crypto landscape evolves with the introduction of spot BTC ETFs, staying informed and adaptable will be crucial for all stakeholders in the Bitcoin ecosystem.

Source: https://www.techopedia.com/how-to-prepare-for-bitcoin-halving

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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Active ETF and AI: A Promising or Perilous Combination?

Active ETF and AI: A Promising or Perilous Combination?

Exchange-traded funds, or ETFs, are popular investment vehicles that offer exposure to a basket of securities, such as stocks, bonds, commodities, or cryptocurrencies. ETFs trade on exchanges like stocks, making them easy and convenient to buy and sell. Most ETFs are passively managed, meaning they track an index or a benchmark and aim to replicate its performance. However, some ETFs are actively managed, meaning they have a fund manager who makes decisions on what securities to include in the portfolio and when to buy or sell them. The goal of active ETFs is to outperform the index or the benchmark, rather than just match it.

Active ETFs have been around for more than a decade, but they have gained more attention and popularity in recent years, thanks to the emergence of new technologies and innovations. One of these innovations is artificial intelligence, or AI, which refers to the ability of machines or software to perform tasks that normally require human intelligence, such as learning, reasoning, and decision making. AI has been applied to various fields and industries, including finance and investing. Some active ETFs have started to use AI as a tool or a strategy to enhance their performance and gain an edge over the market.

But how does AI work in active ETFs? And what are the benefits and risks of this combination? I will offer my point of view on these questions, based on the information I gathered from various sources.

How AI Works in Active ETFs

There are different ways that AI can be used in active ETFs, depending on the type and the objective of the fund. Here are some examples:

  • AI can be used to analyze large amounts of data, such as market trends, economic indicators, company fundamentals, and social media sentiment, and generate insights and predictions that can help the fund manager make better investment decisions. For instance, the AI Powered Equity ETF (NYSE:AIEQ) uses an AI system called IBM Watson to build predictive models on the universe of U.S. equities and identify stocks that have the highest potential for capital appreciation. It is equal to 1,000 research analysts, traders and quants working around the clock.
  • AI can be used to automate the trading process, such as executing orders, rebalancing the portfolio, and adjusting the risk exposure, based on predefined rules and algorithms. This can reduce human errors, biases, and emotions, and increase efficiency and speed. For example, the BTD Capital Fund (NYSE:DIP) uses an AI algorithm to trade U.S. stocks based on momentum, volatility, and trend-following factors.
  • AI can be used to create new and innovative investment strategies, such as using natural language processing to analyze the transcripts of corporate earnings calls and identify signals of future performance, or using machine learning to discover hidden patterns and correlations among different asset classes and markets. For instance, the WisdomTree International AI Enhanced Value Fund (NYSE:AIVI) uses an AI model to enhance the value factor by incorporating alternative data sources, such as patent filings, web traffic, and news sentiment.

What Are the Benefits of AI in Active ETFs

The main benefit of using AI in active ETFs is that it can potentially improve the performance and the returns of the fund, by providing more accurate and timely information, by exploiting market inefficiencies and opportunities, and by adapting to changing market conditions. AI can also lower the cost and the risk of active management, by reducing the need for human intervention, by optimizing the portfolio allocation and the trading execution, and by diversifying the sources of alpha. Furthermore, AI can offer more transparency and accountability, by disclosing the methodology and the rationale behind the investment decisions, and by providing performance attribution and feedback.

Some evidence suggests that AI can indeed enhance the performance. For example, an article on CNBC mentioned that using IBM’s Watson platform, the AI Powered Equity ETF (AIEQ) is among the first ETFs to rely on AI for stock selection. It also mention that the information edge of AI is still unclear, but there are signs that some AI-based funds are doing better than their conventional peers. In another research paper published in 2022 by Rui Chen and Jinjuan Ren, titled ‘Do AI-powered mutual funds perform better’, which examined the broader AI capability in the mutual fund domain. They analysed the prospectuses from the EDGAR database of the US Securities and Exchange Commission. It matched them with AI-powered funds using mutual fund data from the CRSP Survivor-Bias-Free US Mutual Fund Database from January 2009 to December 2019. They discovered that these funds do not beat the market in general. However, a comparison reveals that AI-powered funds outperform human-managed peer funds significantly.

What Are the Risks of AI in Active ETFs

However, using AI in active ETFs also comes with some risks and challenges. One of these risks is that AI is not infallible, and it can make mistakes or errors, especially when dealing with complex, uncertain, and dynamic situations. AI can also be affected by data quality and availability issues, such as noise, bias, or gaps, which can impair its accuracy and reliability. Moreover, AI can be vulnerable to cyberattacks, hacking, or manipulation, which can compromise its security and integrity.

Another risk is that AI can be difficult to understand and explain, especially when using advanced and sophisticated techniques, such as deep learning or neural networks. This can create a lack of trust and confidence among investors, regulators, and auditors, who may not be able to verify or validate the logic and the outcomes of the AI system. This can also raise ethical and legal issues, such as accountability, liability, and fairness, when the AI system makes decisions that have significant impacts or consequences.

A third risk is that AI can create new and unforeseen problems or risks, such as market instability, systemic risk, or social and environmental harm. For example, AI can amplify market volatility and contagion, by triggering feedback loops, herd behavior, or flash crashes, especially when many funds use similar or correlated AI strategies. AI can also disrupt the market structure and the competitive landscape, by creating new winners and losers, by increasing the concentration and the power of a few players, or by displacing or replacing human workers.

Summing Up

In conclusion, active ETFs and AI are a promising or perilous combination, depending on how they are used and regulated.

On the one hand, AI can offer significant advantages and opportunities, by enhancing their performance, lowering their cost and risk, and increasing their transparency and accountability. On the other hand, AI can pose significant challenges and threats, by introducing errors and uncertainties, creating trust and ethical issues, and generating new and unforeseen problems and risks.

Therefore, investors, fund managers, and regulators need to be aware and cautious of the benefits and the risks of AI in active ETFs, and adopt appropriate measures and safeguards to ensure that AI is used in a responsible and sustainable manner. For myself, I hope to see how this will work on Bitcoin ETFs. I will try to collect more data to give you a follow up analysis on that.

 

Source: https://za.investing.com/analysis/active-etf-and-ai-a-promising-or-perilous-combination-200596385

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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GALA Up 200% in Past Month: What’s Fueling the Rally?

GALA Up 200% in Past Month: What’s Fueling the Rally?

GALA, the native cryptocurrency of the Gala Games ecosystem, has been on a roller coaster ride as of late.

The token has gained more than 12% over the past day amid the broader rally among gaming coins. It has also seen its value soar by more than 60% over the past week and 200% over the past month, according to data from CoinMarketCap.

In a note to Techopedia, Anndy Lian, Intergovernmental Blockchain Expert, said:

“The recent surge in GALA’s price can be attributed to a combination of factors, including partnership announcements and growing investor interest in the GameFi sector.”

With a market cap of $2.2 billion as of March 11, 2024, GALA is currently the 56th largest cryptocurrency by market value. It has a circulating supply of 29,309,794,963 coins and a 24-hour trading volume of $1.7 billion.

Where’s next for GALA? Is the latest rally sustainable? Learn in our GALA price analysis.

Key Takeaways

  • GALA has seen a significant surge, gaining over 200% in the past month.
  • The rally is attributed to several factors, including the resurgence in the crypto market.
  • Recent developments, including the economic system of a new game called Last Expedition, have sparked further interest in GALA.
  • Other gaming tokens have also surged alongside GALA, including PIXEL and RON.

Gala Gains Renewed Interest Amid Market Resurgence

Founded in 2019 by Eric Schiermeyer (a co-founder of Zynga) and other industry veterans, Gala Games leverages blockchain technology to facilitate the creation, distribution, and trade of non-fungible tokens (NFTs), enabling players to own unique in-game assets such as characters, equipment, and land.

The platform offers a variety of games spanning different genres, with notable titles including “Town Star” and “Mirandus.” These games are designed to be play-to-earn, allowing players to potentially earn rewards through skilled gameplay or contributions to the ecosystem.

After explosive growth during the 2021 bull run, the platform faced significant challenges, largely attributed to a mix of technical vulnerabilities and the waning interest in GameFi.

A notable incident was an issue with a bridge malfunction, which allowed an attacker to mint over $2 billion worth of GALA tokens.

The incident involved a vulnerability within the multi-chain routing protocol provided by pNetwork, which supports Gala Games, among other DeFi organizations.

Additionally, as the initial excitement around blockchain gaming and NFTs began to stabilize, platforms like Gala Games faced challenges in maintaining the explosive growth experienced in their early days.

Nevertheless, the GameFi project has once again picked up momentum amid the recent market resurgence. With Bitcoin hitting a new all-time high, GALA has also been on a roll, gaining more than 200% over the past month alone.

Why Is GALA Surging?

GALA’s recent surge can be largely attributed to the announcement detailing the economic system of a new blockchain-based game called Last Expedition.

The game features a rich narrative on the alien planet Aura, where players, as hunters, gather valuable resources and tech while facing deadly creatures. It uses in-game currencies as a reward system, which could be swapped for other currencies, including GALA. The announcement read:

“Thanks to the power of GalaChain, a variety of in-game currencies with different purposes will be used to provide an immersive player experience with nearly infinite combinations and strategic choices.”

In-game currencies and Notarium, a key resource, can be earned and used for various upgrades and crafting, adding depth to the gameplay. This intricate economic model, combined with strategic gameplay elements, likely contributes to increased interest and investment in GALA.

 

Gala has been vigorously pursuing other development initiatives as well. The platform has launched its GalaSwap decentralized exchange (DEX) on the GalaChain network and sponsored a $1 million hackathon at the Game Developers Conference.

Anndy Lian commented:

“Their partnership with AWS Game Tech and Alienware is one of the highlights. This increased GALA’s brand visibility for the token in the global gaming arena, and its connection with the big brands brought more credibility. The growing price of GALA has also brought many GameFi users back to the market.”

Positive sentiment across the crypto space, driven by institutional interest and increasing adoption, has benefited altcoins, including GALA.

Furthermore, GALA’s tokenomics include mechanisms such as token burning, where a portion of the transaction fees collected in GALA is burned, effectively reducing the overall supply over time.

This deflationary measure can contribute to the token’s price appreciation as the circulating supply decreases.

Gaming Tokens Surge as Bitcoin Hits $70,000

Aside from GALA, other prominent gaming tokens and metaverse coins also experienced a significant surge in value over the weekend. This surge occurred concurrently with Bitcoin briefly surpassing the $70,000 mark.

One of the tokens experiencing significant gains includes PIXEL, the crypto farming game, and its associated network, Ethereum scaler Ronin. PIXEL reached a new all-time high price above $0.94 overnight, with growing interest reflected in over 500,000 daily active users.

Ronin’s RON token also hit a more than two-year high of $4.05 before slightly dipping to $3.70. Yield Guild Games’ YGG token, announced as PIXEL’s guilds infrastructure partner, saw a 64% increase in value this week.

Moreover, NFT card battler Parallel’s PRIME token reached a new all-time high of $19.78, while BEAM, the token of the Beam gaming network, set a record high of $0.044. Immutable’s IMX, the largest gaming token by market cap, spiked to a two-year high of $3.62.

Tokens such as Axie Infinity’s AXS and Iluvium’s ILV also experienced notable gains.

These gaming token surges often outperformed Bitcoin, which briefly exceeded $70,000 on Sunday, following its historic breach of that price point on Friday. Bitcoin’s current value sits just below $69,500, representing an 11% increase over the past week.

So, will the price of GALA continue moving up? Anndy Lian has a positive view. He said:

“When I spoke to my community on the ground, they said that the price action got their attention, and they are promoting the token non-stop on X. In the last few days, I have seen a big increase in trading volume by close to 110%, amounting to around $1.4B in the last 24 hours. The increased volume means that the buying interest is very high. If you look at CMC on the addresses by time held, I see that the number now is 69.28% vs. 52.14% 1 year ago. This also means that more people are more confident about the token now.”

Giving his short-term GALA price outlook, Lian predicted:

“Maybe consider holding it [GALA] for a longer period. If this situation continues, I believe a 5% to 15% price hike in the next week is also possible.”

The Bottom Line

The remarkable surge in GALA’s value, alongside the broader rally in gaming tokens, comes amid a renewed interest in blockchain gaming and NFTs.

GALA has emerged as the biggest winner in the recent gaming and metaverse coin surge, with the price jumping more than 200% over the past week.

 

Source: https://www.techopedia.com/gala-is-up-200-percent-in-past-month

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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