As the date of the Bitcoin halving draws near, whales in the Bitcoin market have been steadily accumulating a significant amount of BTC over the past week. This surge in demand from these large Bitcoin holders signals a bullish sentiment in the market, especially with just one week left before the fourth Bitcoin halving event, where the block reward will be reduced to 3.125 BTC. In fact, data from crypto analytic firm CryptoQuant reveals that the demand from these “permanent holders” has surpassed the market supply of new Bitcoin for the first time ever. This implies that the current production of new Bitcoin through mining is insufficient to meet the growing demand from cryptocurrency investors. This scarcity is expected to further intensify after the halving takes place.
The growing demand from BTC whales, coupled with the inflow of spot Bitcoin, will exert upward pressure on the price of the leading cryptocurrency. In the medium to long term, this trend has the potential to drive the value of Bitcoin even higher.
The Bitcoin halving is a significant event for the crypto ecosystem, often accompanied by a surge in price action. Historical data has shown that each bull run typically begins several months prior to the halving as anticipation builds around the reduced supply of BTC. After the halving, the price of BTC tends to skyrocket due to the decreased supply and the resulting supply-demand imbalance.
In addition to its impact on the supply, BTC halvings also affect miners, who play a crucial role in verifying transactions and adding new blocks to the blockchain. Each halving cuts the amount of BTC earned by miners in half, thereby increasing the cost of mining new BTC. Consequently, BTC prices must rise to a certain level in order for miners to sustain their operations.
Currently, the average cost of mining one Bitcoin is approximately $49,000, which is profitable considering the current trading price of around $70,000. However, after the halving, BTC prices will need to surpass $80,000 for miners to continue operating at a profit.
The accumulation of BTC by whales is seen as a bullish indicator for the crypto market, as it suggests that large BTC holders are transferring their holdings to cold wallets in anticipation of a price surge.