The forthcoming Bitcoin price halving, according to Jesse Powell, the co-founder and the former Chairman of crypto trading Kraken, may signal the beginning of the next bullish trend.
Following the unusual collapse of FTX, Powell, who made an appearance on an edition of the Bankless program, discussed the general state of the cryptocurrency business and made some predictions about what could be the reason for the space to exit its current bear market.
“Losing $10 billion in the sector of finance from this market is just a huge hit. That could have gone to extravagantly successful things and advanced this business towards further growth, but it was just swept away. It will therefore take significant time to recuperate from it” said he.
Powell continued by saying that the aftermath of FTX caused institutions and many retail users to lose billions of dollars, leaving the cryptocurrency sector with credibility to restore—something that will eventually take some time. However, he asserted that the upcoming Bitcoin halving, which would be anticipated to occur during the first quarter of 2024, would act as the market’s subsequent bullish trigger.
The pace at which fresh Bitcoin arrives on the market is reduced by half, or “Bitcoin halving,” which happens about every four years. The incentive for processing Bitcoin transactions is also reduced by half as a result of halvings, which lowers the amount of fresh supply that is readily available even as demand rises.
Traditionally, due to standard supply and demand dynamics, Bitcoin price halvings have triggered the beginning of a bull market. Furthermore, due to altcoins and the expanded cryptocurrency sector simply following Bitcoin, when Bitcoin compliments, so do the remaining of the entire market.
After the most recent halving in May 2020, Bitcoin reached an all-time high of more than $68,000 in 2021. When the process of halving was implemented in 2016, a somewhat similar activity took place. In the subsequent year, Bitcoin reached a record-breaking high.