Bitcoin’s Price Surge: What You Need to Know After the Halving

Post-Halving Price Increase

Since the third block reward halving in May, Bitcoin (BTC) has made quite a dramatic leap, more than doubling in value. If you check the math, you’ll see the cryptocurrency has skyrocketed by 110%! Moving from $8,566 on May 11 to a staggering test of $18,000, it’s been an exhilarating ride for BTC enthusiasts.

Shifting Liquidity Dynamics

A report from the crypto analytics firm, Chainalysis, highlights a notable transformation in the levels of liquidity and exchange flows since that pivotal halving. They define two categories of Bitcoin:

• Illiquid Bitcoin: Wallets that send less than 25% of the Bitcoin they’ve ever received.
• Liquid Bitcoin: Bitcoin that’s actively being traded.

The findings reveal that the number of Bitcoin available to new investors has started to dwindle, with more Bitcoin becoming illiquid—sort of like that old Xbox console sitting in your attic.

Institutional Influence

Why is this happening? Well, Chainalysis attributes the shrinking supply of liquid Bitcoin to an accumulation frenzy by institutional investors throughout 2020. High-profile figures, like hedge fund guru Paul Tudor Jones, have listed investing in Bitcoin alongside putting money into Apple or Google. And it doesn’t stop there—corporations like Square have jumped on the bandwagon with significant investments. Can you imagine having a boardroom discussion about Bitcoin? Hats off to anyone brave enough to initiate that conversation at work!

The Grayscale Effect

Furthermore, the Grayscale Bitcoin Trust now holds over 500,000 BTC, with 50% of that being scooped up in just the last six months. This trust is now like an exclusive club for prestigious investors. If Bitcoin were a nightclub, Grayscale would be its VIP section.

Mining Revenue Returns

As if the Bitcoin narrative couldn’t get richer, analytics platform Glassnode Studio reported a return of Bitcoin mining revenue to pre-halving levels. Just the day before reporting, miners raked in a record-breaking daily revenue of $21.2 million, which is approximately three times the earnings immediately after the halving. Talk about a profitable venture! Just don’t tell your grandma you want to mine Bitcoin in her basement.

Ether Steps Up

Not to rain on Bitcoin’s parade, but let’s not forget about Ether (ETH). While BTC has seen substantial growth, ETH has outperformed it during the same timeframe, surging over 160% from $185 to $482. So, if you’re only investing in Bitcoin, you might want to take a look across the street—ETH is throwing quite the party!