How Bitcoin Halving Can Affect the Crypto Stocks’ Bottom Line

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How Bitcoin Halving Can Affect the Crypto Stocks’ Bottom Line

Bitcoin miners’ accumulation and capitulation cycles. Image credit: GlassnodeDuring the last major bull run, in November 2021, BTC price hit $69k, while miners’ hashprice yielded 38 cents per terahash (TH). As of April 16th, Bitcoin miner revenue is 11 cents per TH. According to Blockware Solutions projection, miners would then receive 6 cents after the halving.

Balancing the Selling Pressures

The approval of eleven Bitcoin ETFs created a new landscape previously absent from halving cycles. It has been attributed to Bitcoin’s ATH of $73.7k in mid-March. With Bitcoin inflows cut in half from the present ~900 BTC mined per day, ETF capital inflows should further ward against selling pressures.

However, the uncertain geopolitical and macroeconomic situation related to inflation has reversed the trend over the last week. Owing to Grayscale’s continued outflows, the overall Bitcoin ETF flows are now in the negative selling pressure zone.

Concurrent with this trend, there could be more selling pressure from long-term (over one year) holders, now aligning with the August 2022 level. Their behavior will be influenced by the Fed’s actions and hedging against geopolitical events.

When placed into historical context, a Bitcoin price retracement following the halving would not be surprising. Within 500 days, however, BTC prices tend to rally significantly, owing to greater scarcity vs. demand pressures.

Image credit: PanteraCapital

According to ByBit’s report, crypto exchanges may run out of BTC reserves post-halving if the current rate of withdrawals is sustained.

Bottom Line for Crypto Stocks

Pitting the aforementioned factors against each other, it is likely that the BTC price will rise to new ATH in the second half of the year when the force of the supply shock gathers strength. In the meantime, crypto stocks most heavily exposed to BTC will react accordingly.

As the most diverse ETF, holding stocks from exchanges and mining companies to MicroStrategy Incorporated (NASDAQ:) and payment processors, Schwab Crypto Thematic ETF (NYSE:) is down 14.5% over the month but up 24% over the last three months.

Post-halving is likely to see more dips, as it did with prior cycles. However, with the new institutional landscape and greater Bitcoin scarcity, the year’s second half should see renewed crypto stock rallies. This translates to a buying on the weakness interim opportunity for crypto stock investors.

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Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our

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