• Bitcoin’s “halving” event, designed to reduce the rate of new bitcoin creation, has shown minimal impact on its price, with industry insiders emphasizing its correlation with broader market sentiment and geopolitical factors.
  • Despite anticipation among enthusiasts, previous patterns of price gains following halving events have not been replicated, with bitcoin trading around $66,300 as of Monday.
  • Experts suggest that geopolitical developments, such as tensions between Iran and Israel, have exerted a more significant influence on bitcoin’s performance than the halving event itself.

Despite anticipation, bitcoin’s halving event fails to sway prices. Analysts attribute stability to wider market factors.

Halving event: Minimal impact on bitcoin price

Bitcoin’s so-called halving event has made little impact on its price thus far, as industry insiders indicated on Monday that the cryptocurrency’s fortunes are more intertwined with broader financial market sentiment and geopolitics.

Also read: Ripple CEO: Crypto market to exceed $5T, driven by halving and ETFs

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Geopolitical factors overshadow halving excitement

Bitcoin enthusiasts had anxiously anticipated the “halving” – a modification to the cryptocurrency’s underlying technology occurring around 0014 GMT on Saturday, designed to decrease the rate at which new bitcoins are generated.

This alteration recurs every four years, and some crypto enthusiasts cited previous halving events’ price surges as an indication that bitcoin would rally once more.

By 1415 GMT on Monday, there was minimal discernible impact, with bitcoin trading at $66,300. While it recorded a 1.2% increase last week and a 3.4% rise on Monday, it has largely struggled for direction since reaching an all-time high of $73,794 last month.

Mick Roche, senior trader at Standard Chartered’s crypto division, Zodia Markets, remarked, “The geopolitical events unfolding at the minute are having a larger impact than any effect from the halving. So that’d be the perceived easing of tensions between Iran and Israel.”

On Monday, world stocks recuperated some losses as investors retracted some defensive positions adopted due to fears of a broader Middle East conflict.

Eric Demuth, CEO of the Austrian cryptocurrency broker Bitpanda, observed that bitcoin is increasingly influenced by broader market sentiment, with no evident pattern of retail trading activity surrounding the halving. “Crypto is so similar to stocks already. The same people that are trading stocks and tech stocks are also into crypto,” he added.

The excitement surrounding U.S. regulatory approval for spot bitcoin exchange-traded funds (ETFs) aided bitcoin’s recovery last year from a series of crashes in 2022.

Market sentiment: Key driver for bitcoin’s future

Ben Laidler, global markets strategist at eToro, noted that the focus for bitcoin now lies in “institutionalisation.” While retail investors dominate bitcoin, Laidler anticipates regulatory changes in the future that could facilitate ownership by companies, banks, and central banks.

Cryptocurrencies remain a niche asset class, with their combined value around $2.5 trillion, according to market tracker CoinGecko. Regulators caution that they are speculative, risky, and have limited real-world utility.

Crypto markets are also awaiting the U.S. Securities and Exchange Commission’s decision on whether to approve spot ETFs for the second-largest cryptocurrency, ether. However, Demuth and Roche expressed fading hopes that this approval could materialise in May.