April 19, 2024
BTC ETF Excitement and Halving Propel Bitcoin Prices Up in 2024
Bitcoin News

BTC ETF Excitement and Halving Propel Bitcoin Prices Up in 2024

The Next Block Expo conference in Berlin shed light on the significant impact that potential approval of spot Bitcoin exchange-traded funds (ETFs), the impending BTC mining reward halving, and regulatory actions can have on market psychology.

This insight comes as Bitcoin surpassed $42,000, marking its highest value in over a year. Industry experts shared their perspectives on whether the current cryptocurrency bear market is nearing its end. Miko Matsumura, managing partner at Gumi Cryptos Capital, drew parallels between the four-year cycle of Bitcoin mining reward halvings and a medieval battering ram, emphasizing the psychological impact on market participants. Matsumura explained, “Every four years, we swing the ram, and we smash. Four years is long enough that the people inside the castle think we’ve gone away.”

He highlighted the Schelling focal point mechanism in the halving cycle, describing it as a game theory concept where coordination occurs without direct communication. Referring to Bitcoin’s stock-to-flow model, Matsumura noted that the actual cut in BTC supply diminishes with each halving, making the mathematical economic effect smaller. Jonas Jünger, Binance regional manager, echoed these sentiments, emphasizing the deflationary nature of the Bitcoin protocol and the stark contrast with fiat money. Jünger stated,

“It’s just such a foreign concept to everything with fiat money that every time it occurs, it’s just such a celebration of we’re doing something completely different here.”

Animoca Brands CEO Robby Yung offered a unique perspective, likening Bitcoin to a central bank for the industry and Ethereum to an investment bank within their portfolio.

Addressing the potential approval of spot Bitcoin ETFs in the U.S., Yung highlighted their estimated income of $10 to $12 billion as a driving force behind Bitcoin’s recent surge. Jünger emphasized the critical role of such events for exchange operators, noting that the immediate price spike poses challenges to global exchanges. He explained,

“These kinds of events are critical in running the exchange. It’s a matter of succeed or fail in terms of providing the underlying infrastructure when the news goes out and you see that green wick,”

Jünger also emphasized the transformative impact of a spot Bitcoin ETF on consumer protection, as it provides a secure and custody-backed investment vehicle, eliminating synthetic financial instruments.

Image by partystock on Freepik

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