Grayscale Research Note Highlights Bitcoin’s Strengthened Position Pre-Halving

Grayscale, a leading crypto asset management firm, has recently highlighted Bitcoin’s (BTC) strengthened technical fundamentals and growing use cases over the past year, emphasizing its preparedness for the upcoming bullish halving event. The firm’s research note points out the distinct advantages Bitcoin holds this time around, attributing these to on-chain activity and updates in market structure. Researcher Michael Zhao noted, “Despite miner revenue challenges in the short term, fundamental on-chain activity and positive market structure updates make this halving different on a fundamental level.”

Bitcoin’s halving event has historically led to price surges. This process will make acquiring new Bitcoin more challenging, potentially fueling another bull run. Zhao highlighted recent innovations such as ordinal inscriptions and BRC-20 tokens, which have injected over $200 million in transaction fees for miners by February 2024 and are expected to keep driving on-chain activity.

The report also suggests that the upcoming halving could positively impact Bitcoin’s price due to the expected decrease in sell pressure. With the reward per block dropping to 3.25 BTC, the annual buy pressure needed to maintain current prices would reduce to $7 billion from $14 billion, potentially easing selling pressure and contributing to price increases.

Moreover, the introduction of spot Bitcoin ETFs has significantly contributed to Bitcoin’s appeal, accumulating over 192,000 BTC in holdings shortly after their launch.