Galaxy Digital, led by billionaire Mike Novogratz, is highlighting the significance of the upcoming Bitcoin halving event as a tool for evaluating digital currency. Unlike previous cycles, where Bitcoin reached its previous peak levels at the time of halving, this time it has fallen short. On March 14, Bitcoin was priced at $73,737, but the next day it dropped by 5.9%. The halving, scheduled for April 19th, 2020, will reduce mining rewards from 6.25 BTC to 3.125 BTC.
The impact of ETFs on the Bitcoin halving cycle dynamics is noteworthy. Bitcoin has been experiencing a consistent daily increase in price, but the current trend appears to be deviating from the norm. Unlike previous cycles, where Bitcoin saw substantial growth after each halving event, this time it has not yet reached its peak. The last Bitcoin halving occurred in May 2020, with a price of $9,000. By November 2021, it had reached $69,000, indicating a prolonged bullish cycle expansion.
Galaxy Digital points out that the introduction of cryptocurrency exchange-traded funds (ETFs) in January has brought about a shift in market dynamics. These ETFs have been hailed as a “new benchmark for demand” and could potentially impact the traditional dynamics of the halving event. While it is challenging to make precise assessments based on limited historical data, Bitcoin enthusiasts remain hopeful that it will still reach new highs after the halving.
Novogratz believes that Bitcoin will surpass gold and no longer function solely as “the new Gold.” Instead, it will compete for a significant portion of the wealth controlled by baby boomers. This forecast suggests that investors are increasingly favoring digital forms of gold over traditional gold. The growing acceptance of Bitcoin as a payment method will drive the transition away from traditional funding models.
Looking ahead to the Bitcoin halving event, Galaxy Digital anticipates a shift in the market dynamics as we enter a new stage where ETFs will play a leading role. Novogratz’s forecast indicates that Bitcoin’s value will surpass that of gold, solidifying its position as an integral part of the investment process and driving the emergence of digital assets.
