Key points:

  • The fourth Bitcoin halving occurred on April 20, 2024 at 00:14 GMT.
  • Geopolitical tensions related to the confrontation between Iran and Israel have a greater impact on cryptocurrencies than halving.
  • Bitcoin is becoming increasingly dependent on overall market sentiment.

Despite the expected slowdown in the rate of new Bitcoin issuance as a result of the halving, its impact on the value of the cryptocurrency remains limited.

Industry insiders note that Bitcoin’s price is more correlated with overall financial market sentiment and the geopolitical situation than with changes in its own protocol.

How did the halving happen?

On Saturday, April 20, around 00:14 GMT, a significant event took place for the world of cryptocurrencies – the Bitcoin halving, or the reduction of the first cryptocurrency by half. This is a change in the underlying technology of the cryptocurrency that occurs every four years and is designed to halve the rate at which new Bitcoins are created.

Many Bitcoin enthusiasts were eagerly awaiting this event, believing that it would lead to an increase in the price of the cryptocurrency. They base their expectations on the fact that prices have risen after halvings in the past.

However, at the time of writing this article (Monday, 14:15 GMT), there is no noticeable impact of the halving on the price of Bitcoin. It is trading at $66,300, up 3.4% from the start of the day but still well below its all-time high of $73,794 reached last month.

The influence of geopolitics on cryptocurrencies is becoming more significant

Against the background of geopolitical tensions associated with the confrontation between Iran and Israel, the impact of the Bitcoin halving on the cryptocurrency market is becoming less significant. Investors who previously feared wider conflict in the Middle East are gradually reducing their defensive positions, leading to a recovery in some losses in global stock markets.

Financial experts believe that Bitcoin is now increasingly susceptible to overall market sentiment. For example, they do not notice any special activity from retail investors associated with halving. They also note that cryptocurrencies are becoming more like stocks, attracting the same people who trade the assets of technology companies.

It’s worth noting that it was the hype surrounding potential US regulatory approval of Bitcoin-based exchange-traded funds (ETFs) that helped the cryptocurrency recover last year after a series of crashes in 2022.

Thus, at the moment, the main attention of investors in the cryptocurrency space is focused on the process of “institutionalization” of the first cryptocurrency.