Galaxy Digital, led by billionaire Mike Novogratz, presents a Bitcoin halving event, which serves as another tool for assessing digital currency. Unlike previous cycles, it is now a fact that Bitcoin has been unable to reach the previous peak level at the time of halving. On March 14, Bitcoin was priced at $73,737, but it experienced a 5.9% decline the following day. 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 dynamics of the Bitcoin halving cycle
Bitcoin, similar to previous halvings, is witnessing a consistent daily increase in price and reaching new heights on a regular basis. However, the current trend seems to deviate from the norm. What sets this halving cycle apart from previous ones is that the cryptocurrency has yet to surpass its growth limits, which occurred after each halving event in earlier cycles. The most recent Bitcoin halving took place in May 2020, and the price rose from $9,000 to $69,000 by November 2021, indicating a prolonged bullish cycle expansion.
Galaxy Digital highlights that since the beginning of January, when cryptocurrency exchange-traded funds (ETFs) entered the market, there has been a shift in market breadth. These ETFs, considered as “a new benchmark for demand” by Coinbase, may have an impact on altering the standard dynamics of the halving event. Although it is challenging to make an accurate assessment with limited historical data, Bitcoin enthusiasts remain optimistic that it can still reach new highs after the halving.
Galaxy Digital predicts Bitcoin’s potential to surpass gold
Novogratz believes that Bitcoin will surpass its initial function as “the new Gold” and not only compete for the majority of funds controlled by baby boomers but also fight for those funds. This forecast suggests that the market tends to align with investor preferences, indicating that digital forms of gold are gaining popularity over traditional gold. The increasing acceptance of Bitcoin as a payment method will serve as the foundation for transitioning from traditional funding models.
For Galaxy Digital, the future of the Bitcoin halving is diverse as we enter a different stage in the Bitcoin market, with ETFs playing a leading role. Novogratz’s forecast suggests that the digital currency will surpass the value of gold, making Bitcoin an integral part of the investment process and driving the emergence of digital assets.
