Like the day after taking a major exam, the post-halving emptiness can feel quite similar. For four years, we’ve been awaiting this moment, which finally arrived, reducing Bitcoin mining rewards from 6.5 BTC per block to 3.125, ushering in a new era, the fifth, which will lead us to another halving in approximately four years. So the question we ask ourselves is: “And now what?” Now the best part begins. For several reasons.
Take advantage of recurring purchases
As an effective tactic for accumulating cryptocurrencies, you can use the Dollar-Cost Averaging (DCA) strategy, or recurring purchases. This involves buying a fixed amount of money in Bitcoin regularly, regardless of its price.
The goal is to divide your total investment into smaller portions made over periods of time. For example: buying €50 worth of BTC every 7 days instead of €250 every month. What advantage does this strategy have? It reduces volatility in prices.
It allows you to accumulate more bitcoins when the price is low and fewer when the price is high, averaging the investment over time.
The post-halving cycle
As economist and trader Pablo Gil explained in the ‘I Bitcoin Halving Report’ by Bit2Me, “if Bitcoin ultimately replicates its behavior after the ‘fourth halving,’ it is reasonable to expect its price to continue rising towards the range of $90,000-$100,000, and this very positive expectation is precisely what is causing such a stir among cryptocurrency investors, especially those buying Bitcoin in hopes of achieving nearly 100% appreciation in a short time.”
No one knows how long this post-halving cycle will last, but as Abel Peña, CSO of Bit2Me, indicates in the same report, “it’s difficult to predict Bitcoin’s future with exactitude, but significant growth is forecasted in the next decade. As adoption increases, volatility could decrease, solidifying it as a global store of value. The development of new technologies like Lightning Network could facilitate its use as a medium of exchange.” And it’s not just for this reason that the best part begins now.
The possible interest rate cuts
Another important factor to consider in the coming months is the highly probable interest rate cuts by the ECB in Europe and the Fed in the United States. For months, it has been the tool they have used to try to curb inflation stemming from the massive money printing following the COVID-19 pandemic, and now that inflation seems to be easing, rate cuts are expected for the summer.
What does this mean? Ultimately, lowering the price of money means that all those individuals, for example, with a variable-rate mortgage, may see reduced interest payments they have to make each month for the loan they have with the bank and, therefore, have more liquidity to spend on whatever they want. Among other things, on cryptocurrencies, which will increase the demand for buying cryptos.
Under the influence of ETFs
The arrival of Bitcoin spot ETFs on January 11 marked a before and after in Bitcoin’s life. It meant institutional recognition by such a secretive body as the U.S. SEC and was the starting gun for the massive influx of liquidity into a market with limited supply like Bitcoin’s.
During the first months of 2024, we observed how the market reacted very positively to all these capital inflows into the ETFs, with over $850 billion worth of BTC bought, and there is nothing to suggest that this will change in the near future.
If we also consider that there will be even less BTC in the market due to the reduction in rewards generated by the halving that just happened, we could see the perfect storm brewing in the coming months.
And you, are you going to miss out? Remember that you don’t have to acquire a whole Bitcoin to be part of this movement that is going to change the world.
