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Bitcoin Hits $56k as Halving Hype and MicroStrategy Fuel Market Optimism

Published 27/02/2024, 14:59
Updated 07/04/2022, 09:55

As BTC gears up for its 4th halving event, anticipated to bolster demand and prices, recent bullish indicators have heightened market optimism.

As Bitcoin enthusiasts eagerly anticipate the upcoming halving event set for April 2024, which historically drives up demand and prices, the cryptocurrency market has witnessed other bullish indicators like MicroStrategy’s recent acquisition of 3,000 Bitcoins, adding to the optimistic sentiment surrounding the digital asset.

Bitcoin halving, a fundamental aspect of its design, reduces mining rewards every four years, with the previous ones occurring in 2012, 2016, and 2020. Scheduled to happen every 210,000 blocks mined, with the next one occurring sometime in April this year, halvings aim to curtail supply and bolster Bitcoin’s long-term value proposition, ultimately reshaping its supply-demand dynamics.

Amidst these developments, Bitcoin recently surged beyond a remarkable $56,000, marking a significant milestone in its ongoing price trajectory.

Bitcoin’s 4th Halving Due in April 2024

A core component of Bitcoin’s design is the periodic halving of mining rewards. Bitcoin halving events occur approximately every four years. They reduce the block reward – the amount of Bitcoin miners receive for validating transactions – by 50%. There have been three halvings so far, on November 28, 2012, July 9, 2016, and May 11, 2020. Each has cut the block reward from 50 to 25 to 12.5 to 6.25 bitcoins.

Halvings are programmed to happen every 210,000 blocks mined. They limit the supply of new bitcoins entering circulation. The theory is that diminishing rewards will increase demand for Bitcoin amid reduced inflation. Mining involves using specialized computers to verify transactions on Bitcoin’s blockchain ledger. It’s an energy-intensive “proof of work” process.

Overall, halvings aim to promote Bitcoin’s scarcity and long-term value. The maximum possible supply is capped at 21 million coins. Miners will eventually rely on transaction fees rather than block rewards once that limit is reached, which models project will occur around 2140. But for now, halvings remain key events reshaping Bitcoin’s supply and demand dynamics. The next halving is set to occur in April this year.

MicroStrategy Continues BTC Buying Spree with 3,000 Bitcoins

MicroStrategy Inc. recently acquired around 3,000 bitcoins for approximately $155.4 million in cash between Feb. 15 and Feb. 25, paying an average price of about $51,813 per bitcoin including fees.

The purchase was funded using proceeds from MicroStrategy’s at-the-market offering, in which the company can periodically issue and sell shares through sales agents to raise capital. As of Feb. 25, MicroStrategy held roughly 193,000 bitcoins acquired for $6.09 billion, at an average price per bitcoin of approximately $31,544.

Since Jan. 1, the company has generated around $137.8 million by issuing 1.27 million shares through its ATM program, which allows MicroStrategy to sell up to $750 million in stock to further finance bitcoin purchases.

Bitcoin Price in February

Bitcoin’s price showed high volatility during February 2024, ranging from a low of $41,890.50 on Feb. 1 to a high of $56,844.80 on Feb. 27. The most significant single-day percentage increase was 5.36% on Feb. 26. Meanwhile, the steepest single-day drop was 4.16% on Feb. 14.

Daily trading volumes also fluctuated dramatically month-to-month. Volumes ranged from about 14,570 bitcoins on Feb. 3 to around 111,060 bitcoins on Feb. 27. Higher volumes typically accompanied major price swings, pointing to active trading around significant market moves.

Overall, Bitcoin trended upward through February despite bouts of volatility. The price repeatedly found support around $42,000-$43,000 and faced resistance around $52,000-$53,000. External factors like regulation, economic conditions, and institutional interest helped shape market sentiment. Technical indicators and investor behavior also produced short-term price impacts. But the dominant trend remained bullish during the period.

Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

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This article was originally published on The Tokenist. Check out The Tokenist’s free newsletter, Five Minute Finance, for weekly analysis of the biggest trends in finance and technology.

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