Bitcoin halving, planned for April 20, is expected to be a turning point for altcoins. In previous halvings, Bitcoin’s influence generally faded over the next few months. This decline in Bitcoin’s market control has generally triggered more money flowing into other cryptocurrencies. Many of these altcoins have reached new highs in 2024 following Bitcoin’s ATH and are poised to surpass their previous highs following the Bitcoin halving event. Let’s take a look at what exactly might happen for these altcoins after the upcoming Bitcoin halving.
Will altcoins rise immediately after halving?
As the price of Bitcoin rises after the halving, this increase often motivates investors to invest their money and focus on altcoins, bringing a new wave of investment. This influx of new capital often leads to a temporary increase in the value of altcoins. In other words, it increases volatility in the market. Looking back, especially after Bitcoin’s second and third halving, there is a noticeable change in the market where altcoins tend to perform better compared to Bitcoin. Within six to twelve months after the halving, Bitcoin’s price stabilizes at new highs. It is even increasing. Meanwhile, market interest generally skews towards altcoins.
This shift, along with the historical decline in Bitcoin’s dominance after the halving, often triggers an increase in altcoins. Bitcoin signals a time when performance will peak for the altcoin market after the halving event. If the computing power used in Bitcoin mining increases, the mining difficulty will increase to compensate, making Bitcoin mining more difficult. This means miners need to rethink whether it is still profitable for them.
Will Bitcoin investments turn to altcoins?
When this happens, some of the money invested in Bitcoin may shift to altcoins. This may be because miners are diversifying their investments or seeking higher returns by putting their resources into the altcoin market as it becomes easier to make profits after the difficulty adjustment. This could increase demand for altcoins after the halving event and cause prices to rise in the coming months.
The last three times Bitcoin has halved, its market dominance has dropped significantly. Meanwhile, the market value of altcoins increased in the months after the mining difficulty was adjusted. For example, after the second Bitcoin halving on July 9, 2016, Bitcoin’s share in the total cryptocurrency market dropped from 98.33% to less than 40% in 18 months. During the same period, the value of altcoins increased by over $286.5 billion. A similar trend was observed after the third Bitcoin halving on May 11, 2020.
cryptokoin.com As we reported, within a year following this halving, Bitcoin’s share of total market cap dropped from 66.43% to 40%. Meanwhile, the market value of altcoins increased from $90.11 billion to $1.229 trillion. As of April 12, 2024, the market value of altcoins is at 1.13 trillion dollars. At this point, Bitcoin is about to halve. According to some, we are currently in a pre-halving phase similar to what we saw in 2016 and 2020. So, according to some experts, there is a possibility that we will see an increase in altcoin market value after the Bitcoin halving.
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