Bitcoin halving holds a significant place in the cryptocurrency industry. With the fourth halving approaching, scheduled for around April 20, 2024, the crypto community’s anticipation and excitement are palpable.

Marathon Digital Holdings CEO Fred Thiel offers a fresh perspective with the highly anticipated halving event just around the corner. Speaking during an interview with Bloomberg, Thiel suggests that the halving’s impact may already be factored into the market, thanks to the recent surge in spot exchange-traded fund (ETF) approvals.

Thiel shared insights into how Spot ETF approvals have influenced Bitcoin’s recent price surge, hinting at a potential shift in the traditional post-halving price dynamics.

Thiel attributes Bitcoin’s recent rally to an all-time high partly to the approval of spot ETFs. He believes the influx of capital driven by ETF approvals has accelerated the price appreciation typically seen in the months following a halving event.

This suggests that the market may have already accounted for some of the expected impacts of the upcoming halving, leading to a more gradual price increase.

Bitcoin Halving Potential for Continued Growth

Despite suggesting that the halving’s impact may be partially priced in, Thiel remains bullish on Bitcoin’s future growth prospects. He suggests that the current rally may not have peaked, hinting at the possibility of further upside post-halving. Since the start of 2024, Bitcoin has surged by 60%, outperforming other major cryptocurrencies like Ethereum (ETH).

Bitcoin Halving occurs approximately every four years, reducing the reward given to miners for validating transactions. This reduction is important for regulating the supply of Bitcoin and preventing inflation. As the mining rewards decrease, the demand for Bitcoin is expected to increase, potentially leading to a rise in its value.

The halving event occurs every 210,000 blocks, or roughly every four years, with the most recent one taking place in May 2020. It reduced the block reward from 12.5 to 6.25 BTC. This event is crucial for maintaining Bitcoin’s sustainability and scarcity. However, several factors are expected to set the upcoming halving apart from previous ones.

Mining Industry Perspective and Break-Even Rate

As a major mining sector player, Marathon eagerly anticipates the halving event. Thiel notes that, unlike previous halving cycles, where prices typically declined before the event, the current market trend has seen prices rise.

He estimates that to maintain profitability, Marathon’s break-even rate would be approximately $46,000 per Bitcoin post-halving. This indicates Marathon’s confidence in Bitcoin’s future price trajectory.

“But as miners, we are very excited to go into a halving, where for once prices have not declined prior to the halving; rather, prices have gone up, so everybody is obviously maximizing to that,” said Thiel.

At the time of writing, Bitcoin is trading at $70,485 with a total market value of $1.39 trillion. However, Marathon’s MARA stock price has declined by over 20% year-to-date, according to Google data. This disparity between Bitcoin’s price performance and Marathon’s stock price highlights the complexities of investing in cryptocurrency-related stocks in a rapidly evolving market.

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Filed under: Bitcoin - @ April 11, 2024 11:15 am