Bitcoin’s latest dip: Crypto dreams clash with Reality

Following a remarkable seven-month price increase, Bitcoin experienced its worst month since November 2022 in April, with a loss of over 16% of its value. Unexpectedly, this decline occurred immediately following the highly anticipated Bitcoin halving event that took place on April 18. However, the general expectation was that the decrease in supply would boost the coin’s value.

The halving takes place every four years and involves reducing the reward for mining new bitcoins to half. April 18, 2024, was the day that the last halving event took place. This caused the reward to drop from 6.25 BTC to 3.125 BTC. As a result, the proposed number of bitcoins for issuance has decreased, aiming to reduce inflation and boost the cryptocurrency’s scarcity. Consequently, based on economic theory, this could act as an incentive to drive more excellent value.

Though Bitcoin is getting a lot of attention and there is buzz everywhere around it, the value of the currency has yet to go up. On April 13, at a price of $67,188, the coin began to decline from its all-time peak of $75,830 on March 14. The decrease persisted, eventually reaching $56,858 on May 2. However,  big redemptions from popular spot ETFs like BlackRock and Grayscale, which represent investors’ attitudes toward bitcoin, can justify this reduction.

Sumit Gupta, one of CoinDCX’s co-founders, believes that the recent cryptocurrency market halving event may not have had the same influence on prices as previously thought. He implies that the market had already accounted for the highly anticipated news; consequently, the prices exhibited little reaction to this occurrence, resulting in a lackluster price increase. Moreover, the author attributes the decline in the value of bitcoin to additional external factors, such as worldwide economic difficulties and the intermittent hostilities between Israel and Iran – with particular emphasis on the ongoing conflict. Additionally, macroeconomic factors contribute to the reduction of cryptocurrency price volatility.

Despite the current bearish trend, there is cause for optimism, as past halvings in 2012, 2016, and 2020 resulted in significant price increases for Bitcoin. According to this pattern, Bitcoin is expected to develop significantly during the next year and a half.

Shivam Thakral, CEO of BuyUcoin, is optimistic about Bitcoin’s future prospects and believes that, while short-term corrections are usual, halving events may trigger big market shifts and possibly lead to new highs.

However, Jyotsna Hirdyani, the South Asia head at Bitget, believes that consumers should take a “sensible approach” to this roller coaster. She is positive about the future of these digital assets. She assumes it is premature to conclude that the buzz has ended. According to her calculations, the value of Bitcoin might fluctuate between $56,000 and $68,000, while Ethereum’s worth could fluctuate even more dramatically, with values ranging from $2,600 to $3,600.

Hirdyani confidently concludes her speech by predicting that bitcoin will rise much further in the next 10-18 months. Many cryptocurrency holders share this viewpoint. She underlines this point by citing historical patterns that show that market losses are generally followed by spectacular increases, giving investors a sense of the risky and high-yielding character of this trade, which attracts investors despite its volatility.

Trevor Holman

Trevor Holman follows crypto industry since 2011. He joined CryptoNewsZ as a news writer and he provides technical analysis pieces and current market data. He is also an avid trader. In his free time, he loves to explore unexplored places.

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