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Supply Impact: Bitcoin's issuance will halve around April 2024. Despite miner revenue challenges in the short term, fundamental onchain activity and positive market structure updates make this halving different on a fundamental level.
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Miner Positioning: Facing reduced block reward revenue and high production costs, miners have prepared by raising funds through equity/debt issuances and selling reserves, in an attempt to mitigate short-term financial strains.
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Sustained Onchain Activity Growth: The advent of ordinal inscriptions has revitalized onchain activity, with over 59 million Non-Fungible-Token-like (NFT) collectibles inscribed, generating upwards of $200 million in transaction fees for miners as of February 2024. This trend is expected to persist, bolstered by renewed developer interest and ongoing innovations on the Bitcoin blockchain.
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Bitcoin ETFs' Market Impact: The continued adoption of Bitcoin ETFs could significantly absorb sell pressure, potentially reshaping Bitcoin's market structure by providing a new, steady demand source, which is positive to price.
As we get closer to the 2024 halving, Bitcoin is not just surviving; it's evolving. Following the landmark approval of spot Bitcoin ETFs in the United States and changing flows, the very structure of Bitcoin's market is evolving. In this piece, we'll dive into the halving—what it is, why it matters, and its historical impact on Bitcoin's performance. Then, we'll examine Bitcoin’s current landscape, and why it looks so much different than just a year ago.