Technically, it’s the Bitcoin (BTC) Spot ETFs pulling in billions – but potato, potato. BTC ETFs are an extension of BTC, allowing investors exposure to BTC price moves in regular brokerage accounts rather than through cryptocurrency exchanges. In the eyes of investors, it’s safer. And to be honest, since the ETF introduction, BTC value soared. And it’s predicted it will continue to soar until the bitcoin halving effect on price will shake up the market again. The next halving is planned for April 2024, which will see, you guessed it, BTC halve. The result of the halving is this:
- Block Number: 740,000
- Block reward: 3.125 new
- Total new bitcoins between events: 656,250
Double that, and those are the figures you’re working with now. The idea is that halving helps maintain, if not increase, the value of BTC. In theory, if there are fewer BTCs in circulation, demand and value will increase.It’s clever, really, and it’s worked each time.
But BTC is already raking in billions, with a current market cap of a whopping $805.82 billion.So, why is it so popular? Let’s explore.
The History of Bitcoin
BTC emerged as the pioneer of decentralized digital currency (eventually) when Satoshi Nakamoto released it to the market in 2009 with a value of $0.10.
Nakamoto’s vision came in a nine-page whitepaper. It was introduced to the world as a novel form of currency. It promised to operate autonomously and be liberated from the traditional bastions of banks – and to be honest, it is.
BTC’s architecture is fundamentally distinct from conventional monetary systems. It shaped the way for the wider cryptocurrency architecture that people are finally trusting. It’s completely different from traditional financial markets – and that’s what people love. There’s a certain element of untrust between investors, consumers, and traditional banking systems. Just look at fraud cases rising in the US, and you’ll see why.BTC thrives on a peer-to-peer network, facilitating direct transactions between individuals and intermediaries. It’s the decentralized ethos that spread into Proof of Work and Proof of Stake authorization and mining.
The core of BTC is its cryptographic foundation. It’s completely unique. It fortifies its integrity and renders it a formidable force against counterfeiting. There are still cases, but it’s rare compared to traditional financial systems.The currency’s open-source scares some people, but it is proving better.
This universality, and its transparency, propelled BTC to global prominence. Worldwide, there’s now an estimated 219 million, that’s half of all crypto owners.
Why It’s Pulling in Billions
People want BTC and its ETF counterparts – they have unique attributes. Unlike traditional assets, BTC operates independently of central authorities. It draws its value from scarcity, utility, and collective trust. The BTC halving will elevate that. But the halving is not the reason why BTC pulls in billions. BTC pulls in billions because it’s everywhere.BTC ATMs, BTC business payments, BTC marketing, the list could go on.
But the programmed scarcity does help. It’ll definitely set the stage for a boom in value.
Do You Need To Be Rich To Have Bitcoin?
Contrary to popular belief, you don’t need a fortune. You might look at the current value of BTC, $41,194.32, and think it’s out of reach. But you really don’t need to buy a full BTC. $100 before the halving could lead to promising results. BTC divisibility allows for participation at any scale, inviting enthusiasts to own fractions of a BTC. It makes it an inclusive asset.
This democratization of investment is a testament to BTC’s underlying philosophy – a financial system that’s open, accessible, and equitable. Still, $41,194.32 seems crazy.
The Intriguing Dynamics of Cryptocurrency Valuation
Understanding cryptocurrency valuation is essential. But it’s not always simple. The fact the media has such a stronghold on BTC investors and market fluctuations is crazy – but it’s the same for all stocks and coins. The value of cryptocurrencies like BTC is a dance led by supply and demand, with various other factors contributing to the rhythm.
The limited supply of BTC, capped at 21 million, plays a pivotal role in its valuation. This scarcity, combined with the cost of producing new BTCs through mining, adds a layer of complexity to its value proposition.
And there’s the issue of the fluidity of cryptocurrency exchanges, the ever-present competition, and the intricate governance models. Still, BTC is at the top and will be at the top. It’s unlikely we’d see a crash like April 2013 (84% loss of value).
There’s still the looming shadow of regulations and legal requirements to add a layer of uncertainty. They make the valuation of cryptocurrencies fascinating, albeit challenging.
This year will be dramatic for BTC halving – it already is. The spot ETF introduced sent the market wild. The halving will do the same. Nobody should take recommendations, but technically if you look at the price history after BTC halvings, it might be a good time to invest. You don’t need to buy a full BTC to see a financial benefit. Again. Might! It’ll be interesting to see BTC value and trading volume by the end of the year.
