Bitcoin Halving 2024: Analysts Predict Drop in Bitcoin Dominance, Altcoins Engagement Could Spike

Bitcoin is set to undergo its fourth halving process between April 18 and April 21. There can only ever be 21 million tokens of Bitcoin. At present, over 19.6 million BTC tokens are already in circulation. Satoshi Nakamoto, the anonymous founder of Bitcoin added pre-programmed halving to the network in order to slow down the addition of new BTC tokens at regular intervals. This event, that roughly occurs once every four years, leaves a long-lasting impact on the crypto market and related industries. Ahead of the Bitcoin Halving 2024 event, professionals from India's Web3 community have attempted to predict some expected changes that investors can expect, ahead of the period of volatility that lies ahead.

In conversation with Gadgets 360, Shivam Thakral, the CEO of the BuyUcoin said historical precedent suggests that the halving could catalyse significant shifts in the crypto market leading to changes like reduction in Bitcoin price and market dominance. This period, however, is predicted to be fruitful for other cryptocurrencies.

“Bitcoin's price may experience short-term corrections or dips following a halving. Observing previous cycles, we may witness a notable decline in BTC dominance accompanied by a surge in interest and investment in altcoins. The after effect of this halving will continue to show for up to 12-18 months after the event,” Thakral said.

The halving event for the world's most widely used cryptocurrency is automatically triggered after every 210,000 blocks are mined on the blockchain. This process slashes the BTC rewards that miners earn to validate transactions on the blockchain by half – reducing their incentive to mine newer blocks rapidly. This slows down the addition of new tokens in circulation. The upcoming halving will reduce the reward for miners from 6.25 BTC to 3.125 BTC for each block mined.

Market experts have also highlighted services that will play a key role in maintaining the security quotient of crypto-related services in the future. “It's imperative to acknowledge that custody services play a crucial role in ensuring the safety and security of digital assets especially during events that can have amplified price volatility and activity, like the Bitcoin halving,” Manhar Garegrat, Country Head India & Global Partnerships at Liminal Custody Solutions told Gadgets360.

In Garegrat's opinion, crypto custodians should use advanced encryption methods, multi-factor authentication, and continuous monitoring systems to safeguard crypto reserves against cyber threats and unauthorised accesses as more investors could soon begin to invest in cryptocurrencies. While Bitcoin and Ether prices are down, the values of Litecoin, Near Protocol, Elrond, and Iota all rose on Thursday. Bitcoin is presently trading at $61,515 (roughly Rs. 51.3 lakh) after it recently made a new all-time high of $73,000 (roughly Rs. 60.9 lakh).

In the long-term aftermath of Bitcoin halving, the market researchers predict that the price of the oldest cryptocurrency will see a multi-fold spike in value. “It is important to note the risk of pullback in Bitcoin prices due to the uncertainty in the macroeconomy despite positive market sentiment. If the crypto space runs on a historical track record, then within 10-18 months we can expect Bitcoin surging to a new ATH of around $100,000 (roughly Rs. 83.5 lakh),” Jyotsna Hirdyani, South Asia Head at Bitget told Gadgets360.

Hirdyani further noted that BTC halving will result in a decline in miner-held Bitcoin which signals a shift in strategy towards profit-taking and operational upgrades amidst Bitcoin's recent rally to record highs. “Despite this, many anticipate a continuation of the bullish trend leading up to the halving driven by the scarcity narrative inherent to Bitcoin's design,” she added.