Is it Time to Take a Risk with Bitcoin’s Upcoming Halving?

The Christmas season is here again, and the market is looking good for another bull run. Bitcoin (BTC) reached a record high of more than $35,000 in October, likely due to the unconventional market trends and the anticipation of the Bitcoin spot ETF applications pending with the Securities and Exchange Commission.

If you have been in the crypto space since 2014, you know that the holiday season comes with a feeling of euphoria — especially this year. Most people seem to agree that a bull run is close, so it’s time to pay attention to the market and explore different niches — and to consider your approach to trading.

The difference between Web 1.0, Web 2.0, and Web 3.0 is quite significant, and understanding it is essential for traders. Web 1.0 was mainly focused on delivering content, while Web 2.0 was more about collaboration and user-generated content. In contrast, Web 3.0 is often referred to as the Metaverse, and it focuses on decentralization and automation.

A conventional Christmas rally?

Cryptocurrencies have been known to experience a surge in trade volumes, significant market movements, and price surges during the festive season. However, the current market dynamics are being influenced by unprecedented factors, such as the global pandemic in 2020, Elon Musk’s tweets in 2021 and 2022, and other regulatory developments and geopolitical tensions.

Forecasting crypto market behavior is a difficult task, and this year is no exception. While past years may have brought December delights, this season is influenced by far more complex factors than the difference between web 1.0, web 2.0, and web 3.0, metaverse, and AI-written articles.

Never mind ETFs — Bitcoin’s halving lies ahead

Investors have been positioning themselves in anticipation of a greenlight from the SEC for a Bitcoin ETF. The theory here is that an ETF will bring institutional investors to crypto.

The Bitcoin halving event — scheduled to occur in April 2024 — is also creating a buzz. This event is tied to Bitcoin’s finite supply of 21 million coins. The apex cryptocurrency is generated mainly through mining and the halving ensures Bitcoin remains a rare and highly sought-after asset. It is triggered every 210,000 blocks (or roughly every four years) and reduces the number of new Bitcoin created in each block by 50%.

The upcoming halving has led to big predictions for Bitcoin’s price. “Rich Dad, Poor Dad” author Robert Kiyosaki believes it will hit at least $100,000. Max Keiser is forecasting a new all-time high of $220,000. MicroStrategy founder Michael Saylor is — as always — extremely bullish, envisioning a price of $1 million. The predictions are based on both historical trends and social influences. These and other unconventional forces were behind the rally we witnessed in October.

In my opinion, Bitcoin could comfortably break its all-time high of $69,000, and possibly surpass $169,000.

What happens if an ETF isn’t approved?

Analysts from JPMorgan have speculated that if the SEC refuses to accept the ETF applications, it could result in legal action by the applicants. In August, a court granted Grayscale a victory against the SEC, which could open the door for Grayscale to turn its Bitcoin trust into a spot ETF. BlackRock, ARK Invest led by Cathie Wood, and other firms are also competing to get ETF approval.

It appears that multiple spot Bitcoin ETFs could be authorized in the coming months.

Conflict in the Middle East

Geopolitical tensions and wars can have a huge impact on the cryptocurrency market. The ongoing Middle East conflict between Israel and Hamas is a prime example of how external factors can affect the crypto market. Although the immediate implications are unclear, it is known that investors often turn to alternative assets such as cryptocurrencies during global crises. Despite that, the war hasn’t had a major effect on the crypto market yet, but the situation is still unfolding and the market could experience changes in sentiment and capital flow.

Three days after the war started, crypto prices dropped and oil prices rose due to traders speculating that the war could disrupt supplies if it spread to countries such as Iran. The Middle East is home to some of the world’s busiest shipping routes such as the Red Sea, Persian Gulf, and the Suez Canal. This increases the fear of economic peril if the conflict were to spread to these places.

The Economist Intelligence Unit’s Pat Thaker commented on CNBC that an expansion of the war into the Sinai Peninsula and Suez region ”increases the risks of an attack on energy and non-energy trade flowing through the Suez Canal,” which accounts for almost 15% of global trade, almost 45% of crude oil, 9% of refined, and 8% of LNG tankers transit through that route.”

So far, the war has not had a major effect on the crypto market, but if the conflict continues to escalate, it could lead to heightened price sensitivity as we enter the Christmas season.

Altcoin season?

As the festive season approaches, traders are speculating if the “altcoin” season will kick-off. History suggests that December and January have been the times of previous alt-seasons. Therefore, I am expecting the next alt-season to start in December, potentially supported by Bitcoin ETF approvals. I am particularly interested in GameFi and tokenized real-world assets (RWA). (Of course, past predictions have been wrong and the same might happen again.) When the altcoin season begins, tokens with valuable use cases in these areas could be the ones to watch.

This Christmas could be a crypto bull run, however, the future remains uncertain. The ETF decision, global tensions and the potential of altcoins require constant monitoring. Although it is impossible to predict the future, we can be ready for it by staying informed, managing risk and taking advantage of the strategic opportunities. It’s time to embrace the future of finance in the thrilling crypto world.