In just three days, Bitcoin will undergo its next halving event, a significant occurrence in its price history. Scheduled approximately every four years, this event, ingrained in the cryptocurrency’s source code, aims to introduce anti-deflationary features to Bitcoin. While past halvings have contributed to price appreciation, the dynamics this time around might differ. Here’s what to consider.

At present, each block mined rewards miners with 6.25 new Bitcoins. Following the halving, this reward will halve to 3.125 BTC per block. In theory, this reduction should alleviate selling pressure on Bitcoin. Miners, who receive new BTC as rewards, often sell these tokens promptly, potentially decreasing daily token sales post-halving. This scenario could create a demand-supply imbalance, potentially driving prices upward. However, the market’s response is far more intricate.

Past halvings sparked debates and uncertainties. Some argued that market anticipation already factored in the halving’s effects, undermining its impact. However, history proved otherwise. Preceding each of the last three halvings, Bitcoin experienced minor price surges, followed by significant increases in the ensuing year, leading to new highs.

While this trend prevailed in the past, it’s not guaranteed for this halving. With previous halvings and market cycles informing investors, forecasts might be more accurate, potentially altering the usual cycle dynamics. Notably, BTC reached new all-time highs before the halving for the first time, possibly indicating investors pricing in the event’s impact beforehand, possibly influenced by factors like ETF approvals.

In this unprecedented market cycle stage, various outcomes are plausible, challenging investors’ ability to predict BTC’s trajectory post-halving. Only time will reveal the true impact of the upcoming halving on Bitcoin’s price.

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Bernstein, a brokerage firm, recommends purchasing stocks of bitcoin miners Riot Platforms (NASDAQ:RIOT) and CleanSpark (NASDAQ:CLSK) ahead of the impending halving event. They anticipate a bullish trajectory for Bitcoin post-halving, once mining hashrates adjust to reduced rewards and ETF inflows pick up.

Despite concerns over profitability following the halving, Bernstein maintains a positive outlook on bitcoin mining stocks, citing their potential for superior execution and market leadership in self-mining hashrate.

Analysts Gautam Chhugani and Mahika Sapra highlight the historical trend of Bitcoin price breakout following halving events, with recent ETF approvals driving pre-halving price appreciation. However, recent fluctuations, including a 15% drop in the last 10 days, coincide with slower ETF inflows.

Bernstein expects Bitcoin’s bullish momentum to resume post-halving as mining hashrates adapt and ETF inflows recover. The rollout of spot bitcoin ETFs by wirehouses and registered investment advisors is seen as a structural driver for bitcoin demand, with a forecasted cycle high of $150,000 by 2025.

In summary, Bernstein suggests seizing the opportunity presented by the miner fear factor preceding the halving and investing in RIOT and CLSK stocks for potential long-term gains.

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With Bitcoin’s fourth mining reward halving imminent, Goldman Sachs urges investors to exercise caution in extrapolating past halving cycles for price predictions, emphasizing the role of macroeconomic conditions and inflows into spot ETFs.

While previous halvings have historically coincided with Bitcoin price appreciation, Goldman’s Fixed Income, Currencies, and Commodities (FICC) and Equities team warns against simplistic interpretations due to varying macroeconomic landscapes.

Despite bullish sentiments surrounding previous halvings, the time taken to reach peak prices and the magnitude of price increases differed significantly across cycles.

Crucially, the macroeconomic backdrop during previous halvings contrasted with the current environment characterized by high inflation and interest rates. Previous cycles occurred amid rapid growth in M2 money supply and near-zero interest rates, fostering risk-taking behavior across financial markets.

For history to repeat itself, supportive macroeconomic conditions are deemed essential.

However, present circumstances diverge from past cycles, notably with interest rates in the U.S. surpassing 5% and market expectations discounting prospects of rate cuts amid persistent inflation and economic resilience.

Despite Bitcoin’s 50% rally this year and record highs preceding the halving, driven by inflows into U.S.-based spot ETFs, some analysts speculate that much of the post-halving surge may have already materialized.

Goldman views the halving as a “psychological reminder” of Bitcoin’s capped supply, emphasizing the significance of ETF uptake in determining medium-term price outlook.

The team suggests that whether the halving event leads to a “buy the rumor, sell the news” scenario may have a limited impact on Bitcoin’s medium-term trajectory. Instead, they highlight ongoing supply-demand dynamics and ETF demand as primary drivers of spot price action in the crypto markets.

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The resurgence of digital assets in mainstream finance brings attention to Bitcoin automated teller machines (BTMs), with experts cautioning against the financial risks inherent in these machines, particularly in areas predominantly inhabited by Black and Latino residents.

BTMs, physical kiosks facilitating crypto conversions, have proliferated, especially during the pandemic, reaching approximately 31,100 units nationwide. However, investigations into the BTM boom reveal a disproportionate presence in Black and Latino neighborhoods, coupled with exorbitant transaction fees of up to 22%.

Bitcoin Depot, the leading US operator with around 7,300 BTMs as of April 8th, boasts high fees despite promoting financial inclusion. According to a November 2023 presentation, over 80% of Bitcoin Depot’s customers earn less than $80,000 annually. However, critics liken the high fees to predatory lending practices.

Despite claims of non-discriminatory placement, a Bloomberg analysis indicates a correlation between Bitcoin Depot’s BTM locations and areas with large Black and Latino populations, particularly in states like Georgia and Texas.

While some BTMs operate in major stores like Circle K and Cumberland Farms, local businesses often host them, with operators either paying rent or providing a monthly stipend to the store owners.

Transaction fees vary, with some BTMs charging flat rates plus a percentage fee. Critics dubbed this practice “predatory inclusion,” akin to payday lending, targeting marginalized communities.

In states like Alabama and Dallas, BTM placement aligns with higher concentrations of Black and Latino residents, raising concerns about equity and accessibility.

Bitcoin Depot’s CEO, Brandon Mintz, defends the fee structure, citing operating expenses and convenience as key factors. However, competitors CoinFlip and Bitstop also impose steep fees, up to 22%.

Despite the limited utility of BTMs for selling crypto, Bitcoin Depot eyes expansion, awaiting approval for operations in New York, a potential market expected to boost the company’s size significantly.

Critics like Aaron Klein from the Brookings Institution caution against the proliferation of BTMs, highlighting their limited functionality and the risks associated with crypto investments.

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Kraken, the second-largest U.S.-based crypto exchange, has unveiled its own crypto wallet, joining the ranks of competitors such as Coinbase(NASDAQ:COIN) and MetaMask in the saturated market.

The newly launched self-custodial “Kraken Wallet,” debuting on Wednesday, offers support for eight blockchains including Bitcoin, Ethereum, Solana, and Dogecoin. Notably, it is the first wallet from a major exchange to be open-sourced, allowing developers to access and contribute to the code. Kraken also incentivizes developers to identify vulnerabilities through its open-source grant program.

Focused on user privacy, Kraken Wallet collects minimal data necessary for functionality, shielding IP addresses and protecting users’ identity and location information. This emphasis aligns with the principles of the crypto space, emphasizing self-custody and privacy.

While Coinbase’s Coinbase Wallet remains popular, other major exchanges like Binance and OKX also offer wallets integrated into their ecosystems. Kraken’s move into the wallet space reflects its commitment to providing users with access to on-chain ecosystems and maintaining a user-centric approach.

Kraken has been expanding its product offerings, including discussions with layer 2 teams to explore building its own layer 2 blockchain. The development of Kraken Wallet underscores the importance of self-custody in the crypto ecosystem, particularly in light of the risks associated with leaving assets on centralized exchanges highlighted by past incidents such as the collapse of FTX crypto exchange in 2022.

Eric Kuhn, Product Director for Kraken Wallet, emphasized the significance of the “your keys, your crypto” ethos and expressed Kraken’s commitment to building the best all-in-one crypto wallet that is open-source, secure, and private.

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