Category: Blog-new

The Bitcoin halving, deeply embedded within the cryptocurrency’s value proposition, isn’t just a mere event; it’s a pivotal moment that reverberates across the entire digital finance ecosystem. In this article, we delve into the multifaceted impact of Bitcoin halvings on the digital asset industry, examining its implications beyond short-term price movements.

It’s Ancient History

Bitcoin halvings are intrinsic mechanisms within the Bitcoin protocol designed to regulate the issuance of new tokens by decreasing mining rewards at regular intervals. This deliberate reduction plays a crucial role in shaping Bitcoin’s tokenomics and supply dynamics, reinforcing its deflationary nature and underpinning its value proposition.

Historical Perspectives

Tracing back through halving events in 2012, 2016, and 2020, we can observe recurring patterns in how halvings affect the crypto world. These events act as inflection points, catalysing fluctuations in market sentiment and user behaviour and punctuating the narrative of Bitcoin’s evolution as the leader of the crypto ecosystem.

150 Days Later

Following each halving event, Bitcoin has historically experienced significant price increases within the 5-6 months that followed. For example, 150 days following the previous three halvings, BTC prices have increased by 999%, 15%, and 24%, respectively.

Beyond the Price

Apart from price-related effects, halvings are associated with a profound, long-term increase in adoption metrics. Bitcoin’s heightened visibility during pre- and post-halving periods stimulates newcomers to explore and potentially purchase the digital currency, contributing to expanding its user base.

Institutional Interest and Technological Advancements

Institutional interest in Bitcoin also tends to surge around halving events, propelled by the narrative of Bitcoin’s capacity as a store of value and a potential hedge against inflation. High-profile endorsements from corporate treasuries and prominent holders validate BTC’s legitimacy as an asset class, further fueling adoption. As institutional capital flows into the cryptocurrency market, infrastructure and product offerings emerge, paving the way for widespread adoption among traditional financial institutions.

Conclusion

The significance of Bitcoin halvings is a testament to the enduring strength and resilience of the cryptocurrency industry. Beyond their immediate effects on price and user sentiment, these events catalyse increased interest and awareness, institutional participation, and technological innovation, laying the groundwork for the continued growth and maturation of digital finance.

As we bid farewell to April, it’s time to reflect on the key developments in the Web3 ecosystem and anticipate what May has in store. April 2024 was a mixed bag for crypto, DeFi, and NFT markets, with ups and downs defining the landscape.

Crypto Market Performance in April 2024

April was challenging for crypto, marked by an 11.3% decrease in total market capitalization. Shifts influenced this downturn in rate-cut expectations, geopolitical risks, and a slowdown in spot bitcoin ETF flows. Despite these challenges, there were also positive developments.

Following regulatory approval, six spot crypto-based ETFs commenced trading in Hong Kong on April 30. Moreover, the total supply of USD-pegged stablecoins hit a two-year high, indicating sustained capital inflows into the crypto market.

While most of the top ten coins by market capitalization closed the month in negative territory, TON and BNB showed relative resilience. TON gained 1.0%, while BNB experienced a slight decrease of 1.4%. TON’s robust performance can be attributed to the increasing traction of its ecosystem, achieving all-time highs in monthly active addresses and total value locked (TVL) in the network. BNB has also been a consistent top performer in recent months.

ETH and BTC both saw declines of around 8% in April. However, approving three spot BTC ETFs and three spot ETH ETFs in Hong Kong marked a positive milestone for the two leading cryptocurrencies. XRP and SHIB experienced larger price declines, dropping 17.1% and 19.2% over the month. DOGE, ADA, SOL, and AVAX demonstrated the weakest performances among the leading pack, falling by around 30% by the end of the month.

Decentralised Finance

April was relatively quiet for the DeFi sector, which saw a 0.7% decrease in total value locked (TVL). However, Merlin Chain, a native Bitcoin layer-2 solution, emerged as the top gainer with a 1000% monthly gain and a TVL exceeding $1 billion. In terms of protocols, Pendle and Hyperliquid stood out. Pendle’s TVL reached $5 billion, with a cumulative trading volume exceeding $15 billion. Hyperliquid’s TVL surpassed $435 million, outpacing Aptos, Near, and Cardano.

Non-Fungible Tokens (NFTs)

The NFT market also experienced a decline in April, with total sales volume decreasing by 21% to $1.11 billion. Bitcoin collections dominated the spotlight, with four of the top five collections by sales volume being Bitcoin-based. These collections, including Ordinals, PUPS, WZRD, and NodeMonkes, collectively recorded a sales volume of $423 million. Meanwhile, sentiment toward Ethereum collections remained relatively poor.

Regarding NFT sales volumes across the top chains, Bitcoin led with $567 million, Ethereum with $241 million, and Solana with $153 million. However, Bitcoin saw a 5% decrease in total volume, while Ethereum and Solana experienced significant declines, close to or exceeding 50%. These figures suggest a recent shift in collector focus toward Bitcoin-based offerings.

As we move into May, the Web3 ecosystem continues evolving, presenting challenges and opportunities for market participants. Stay tuned for more updates and insights as we navigate the dynamic world of crypto, DeFi, and NFTs.

In the fast-moving space of digital currencies, Bitcoin is the pioneer cryptocurrency that occupies the attention of crypto enthusiasts from all over the world. Amidst all its technical complexities, one thing that is the core of the very nature of Bitcoin is “Bitcoin halving”. In this guide, we will delve into the internal mechanisms of this phenomenon and find out why it is so important for Bitcoin’s value proposition.

Understanding Bitcoin’s Intrinsic Value

Before we dive into the Bitcoin halving, let us first understand why Bitcoin holds value. Contrary to fiat currencies, which can be printed infinitely by governments and central banks, Bitcoin stands on the foundation of verifiable scarcity. The Bitcoin protocol ensures that the total amount of coins in circulation is fixed at 21 million. This limit is built-in, which is quite different from the traditional systems, making it impossible for more BTC to be created, thus ensuring its scarcity and value over time.

What Is Bitcoin Halving?

Bitcoin halving refers to an event usually repeated every four years, when the reward for mining new bitcoins is halved, i.e., reduced by 50%. This is the backbone of Bitcoin’s economic model as it impacts the rate at which new Bitcoins are issued and circulated.

For example, in May 2020, the mining reward was cut in half from 12.5 to 6.25 bitcoins per block. In the third week of April 2024, it is expected to reduce more to about 3.125 BTC per block. This process will continue until all 21 million Bitcoin are mined, forecasted to happen by the year 2140.

At Coinsdrom, we integrate the most cutting-edge technologies to stand as the most reliable, nimble and convenient platform in the cryptocurrency exchange market. Being aware of the impact of the Bitcoin halving event, we have set up our platform to help the users capitalize on this key crypto world moment. We make sure that they are well-prepared with the essential information and tools to make intelligent decisions.

How Does Bitcoin Halving Work?

Bitcoin transactions are validated by a distributed network of miners or validators in a process called mining. Miners, who are considered the spine of the Bitcoin network, run their computers with powerful equipment to solve complex mathematical problems. These miners are rewarded with bitcoins for completing the task of being the first to verify a block of transactions and adding it to the Bitcoin blockchain. The Bitcoin halving event cuts the mining reward by half, making the process more competitive and resource-intensive over time.

The Bitcoin protocol prescribes that this reward is halved every 210,000 blocks, which is about every four years, causing a lot of price volatility in the Bitcoin market during such periods.

Is There Any Impact of Bitcoin Halving on BTC Price?

The halving events have usually proven to be the triggers of major price swings in the past. An instance of this was the halving of block reward from 50 to 25 BTC in 2012.  During the next couple of months after halving, the price showed significant growth that led to a bull market peaking in late 2013, with Bitcoin reaching over $1,000 – the all-time high of that time.

Although the price of Bitcoin typically spikes around these halvings, it is important to remember that price movements are speculative and often affected by other factors, aside from just supply and demand. Global events, public perception regarding cryptocurrency, and other economic factors are the key determinants of the price dynamics. 

Therefore, while halvings generally give rise to expectations of price growth because of lowering supply, these expectations may not always be realized.

Bottom Line

The idea of bitcoin halving is a key to the comprehension of Bitcoin’s value and its deflationary nature. Through a systematic process that decreases the speed at which new coins are created, the network guarantees that the currency remains scarce and valuable through time. 

With each next halving event approaching, we expect the market to be full of speculation and anticipation. At Coinsdrom, our clients can easily buy Bitcoin by using different payment methods like credit cards, bank wire transfers and local payment mechanisms. Our brand is ever determined to strictly adhere to the relevant laws and regulations in order to create a safe and compliant arena for all our users.

Entering the world of cryptocurrency can be both thrilling and intimidating, especially with the constant influx of new projects vying for attention. Amidst this sea of possibilities, it’s crucial to navigate with caution and discernment, ensuring that your time and energy are placed in projects worthy of your trust.

At Coinsdrom, we are constantly engaged with our audience and share insights for people who want to be part of the crypto space. With that being said, let’s see some of the basic qualities you should look for when determining if a new cryptocurrency is to be trusted.

1. The Coin is Listed on a Safe Crypto Exchange

A foundational aspect of assessing the credibility of a new cryptocurrency project is its listing on a safe crypto exchange. Established platforms typically have stringent listing criteria and conduct thorough due diligence before adding new assets to their roster.

By choosing cryptocurrencies listed on a safe crypto exchange, you can significantly reduce the risk of falling victim to scams or unreliable projects. These companies provide a level of assurance, as they prioritize security and compliance, fostering trust within the cryptocurrency community.

2. Transparent and Competent Team

Behind every successful cryptocurrency project lies a transparent and competent team. Users should scrutinize the backgrounds and qualifications of the team members, ensuring they possess relevant expertise in areas such as blockchain technology, software development, finance, and project management.

Transparency is paramount; credible projects readily disclose information about their team members, including their roles within the project and any past successes or experiences. If you see a project listed on a safe crypto exchange backed by a solid team, things start to look good, based on our opinion.

3. Clear Roadmap and Purpose

A trustworthy cryptocurrency project will have a well-defined roadmap and a compelling purpose driving its development. The roadmap should outline the project’s objectives, milestones, and development timeline in a transparent and accessible manner.

Additionally, the project’s purpose should resonate with you and address real-world challenges or opportunities within the cryptocurrency ecosystem. Projects with a clear roadmap and a defined purpose demonstrate foresight and planning, instilling confidence in their ability to execute and deliver on their promises.

4. Community Engagement and Support

Community engagement serves as a barometer of a cryptocurrency project’s credibility and potential for success. A strong and active community indicates widespread interest and support for the project, fostering a sense of trust and legitimacy.

You should look for projects with vibrant online communities across social media platforms, forums, and dedicated discussion groups. Engaged communities provide valuable feedback, promote project awareness, and serve as advocates for the project’s long-term success.

In conclusion, trusting new cryptocurrency projects requires diligence, research, and critical thinking. By considering factors such as listing on a safe crypto exchange, the credibility of the project team, the clarity of the roadmap and purpose, and the strength of community engagement, you can make informed decisions.

Coinsdrom wants to help you be aware that the allure of new opportunities may be enticing, so it’s essential to exercise caution and conduct thorough due diligence before committing to any new project.