Bitcoin Halving Countdown: 34 Days Left
This article is from Cointelegraph and discusses the potential impact of the upcoming halving on DeFi.
Summary:
Marathon, a mining giant, has seen a 229% increase in annual revenue and is prepared for the Bitcoin halving in 2024.
Background:
Grayscale report: What’s different about the Bitcoin halving countdown in 2024?
Table of Contents:
Motivating the overall market
Testing for DeFi platforms
Strengthening the “politics” of Bitcoin
With only 34 days left until the Bitcoin halving, another catalyst for growth is on the horizon. Expected to take place in mid-April, the reward for each block on the Bitcoin network will decrease to 3.125 BTC. However, the impact of the halving extends beyond Bitcoin’s supply and price, spreading to the entire cryptocurrency market, especially DeFi.
This article, sourced from Cointelegraph, invites experts in the DeFi field, including market analysts, Bitcoin executives, and Bitcoin adoption advocates, to share their views on the impact of the Bitcoin halving on DeFi.
Bitcoin Halving Countdown: 34 Days Left
The rise of decentralized finance (DeFi) highlights the powerful potential of blockchain technology in democratizing financial services. In this process, Bitcoin, as the pioneer of cryptocurrencies, plays a crucial role in shaping the spirit and infrastructure of DeFi.
According to Grzegorz Drozdz, a market analyst at Invest.Conotoxia.com, the Bitcoin halving event is expected to not only increase the value of Bitcoin itself but also have a positive impact on the entire cryptocurrency market. He points out that Bitcoin is a key component of the DeFi ecosystem, with BTC capital currently accounting for 54% of the total cryptocurrency market capitalization, which will attract more investment into various DeFi platforms and projects in the future.
On the other hand, historical data shows that as Bitcoin becomes scarcer due to the halving, its price tends to rise. This upward price trend may attract more investors to focus on and invest in DeFi protocols. As Bitcoin prices rise, investment and adoption of the DeFi ecosystem may increase, leading to an overall “rising tide” effect in the cryptocurrency market.
Therefore, the reduced issuance rate of Bitcoin poses challenges to the operation of decentralized exchanges (DEX) and lending platforms. As BTC is often used as collateral on these platforms, its scarcity may enhance its utility as collateral, thereby affecting lending rates, liquidity pools, and liquidity mining strategies in the DeFi ecosystem.
Additionally, the halving event is seen as a crucial moment to test the resilience and adaptability of DeFi protocols. With the volatility of supply and demand dynamics, DeFi platforms must innovate and adjust strategies to cope with these changes. Bitcoin journalist and advocate Joe Hall stated that many projects claiming to incorporate “decentralization” into DeFi have not actually met the true standards of decentralization. He expects Bitcoin’s demonstrated antifragility and predictability to provide a clear direction for the DeFi field and help define what “true decentralized finance” means.
The predictability of the Bitcoin halving event is well-known in the cryptocurrency market. In a financial and political world filled with uncertainty in the 21st century, Bitcoin’s predictability adds value to it. Joe Hall believes that this predictability is very beneficial for the cryptocurrency industry as it often leaves regulatory authorities at a loss.
John Dennhy, the founder of Mi Primer Bitcoin, also agrees with this view, stating that the Bitcoin halving is the best example of decentralization.
Although the Bitcoin halving is not a panacea for solving the challenges of cryptocurrencies or the entire DeFi ecosystem, it is undoubtedly a significant event that sparks policy discussions and promotes technological innovation. This Bitcoin halving is crucial.
Related Reports
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Coinbase report: Why can’t the “Bitcoin halving” guarantee a BTC price increase?