Hours before the imminent Bitcoin halving, Binance founder and former CEO Changpeng “CZ” Zhao clarified that it would not impact supply like stock splits.
Zhao disclosed this on X while attempting to address common misconceptions surrounding the much-anticipated Bitcoin halving event. This clarification comes just hours before the event, which is now less than 100 blocks away. The halving is expected to impact BTC’s mining rewards and availability.
Insights into Bitcoin Supply Dynamics
The former Binance CEO referenced a post from last October, announcing that a new page dedicated to Bitcoin halving would be added to the Binance platform. In his recent remark, Zhao addressed a cryptocurrency enthusiast’s question about whether the Bitcoin halving is comparable to a stock split.
Someone asked me if bitcoin halving is like a stock split… We are still early. (Answer is no)
Happy halving! pic.twitter.com/gxAvfOpGQH
— CZ 🔶 BNB (@cz_binance) April 19, 2024
He noted that both phenomena are not comparable, emphasizing that investors in the Bitcoin market are still early. The emphasis is that this mechanism is not similar to a stock split because it does not increase the number of coins but decreases the rate at which new Bitcoin tokens are introduced.
For the uninitiated, a stock split is an event carried out by a company that involves dividing the shares it currently has. This move essentially increases the number of shares available. While a stock split and the Bitcoin halving involve changes in supply and inflation rate, they serve different purposes.
Zhao shared observations from the past three events, suggesting that a gradual increase in Bitcoin’s price has historically followed each halving. He carefully noted, however, that past trends are not indicative of future results, urging the community to manage their expectations.
Market Reactions and Expert Predictions
Experts like Samson Mow and Anthony Pompliano highlight the upcoming Bitcoin halving as a factor that could boost BTC’s price. They suggest that the event will trigger a supply shock as the rate of new Bitcoin created halves, leading to reduced availability, as earlier reported.
Markets are also confused about the #Bitcoin halving. Most probably don’t know it exists. Some that know can’t figure out if it will make prices go up or down. Some are worried miners will go under. So many will sit and wait until it’s clear what comes next.
— Samson Mow (@Excellion) April 16, 2024
Meanwhile, the recent approval of spot Bitcoin ETFs has spurred a demand shock, with these funds acquiring more Bitcoin than miners produce daily. Mow predicts this confluence of supply and demand dynamics may result in a substantial price surge, potentially pushing Bitcoin’s value to record highs.
At press time, Bitcoin has risen in the past 24 hours. BTC is currently valued at $64,668, marking a 4.76% increase within a day. This rise has not gone unnoticed by market participants, who have contributed to a daily 21% surge in trading volume, now reported to be $51,102,430,740.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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