Bitcoin Halving

The recent Bitcoin halving event, which cut miner rewards in half, was expected to cause a price drop. However, Bitcoin defied expectations and has even seen a price increase. This article explores how pre-halving sales by miners and the introduction of U.S. spot Bitcoin ETFs may have played a role in mitigating the potential price slump.

Bitcoin Halving and Miner Revenue

Bitcoin’s halving mechanism is a predetermined event that cuts the number of new Bitcoins created every block mined in half. Every four years, a halving event occurs. This event is designed to control inflation and maintain scarcity. The latest halving occurred on April 20, 2024, reducing miner rewards from 6.25 BTC per block to 3.125 BTC per block.

This reduction in miner revenue forced miners to significantly ramp up selling pressure as a way to maintain operations. They achieved this by offloading some of their holdings. Traditionally, such selling has resulted in increased volatility and price declines in the short term.

Bitcoin Halving: Strategic Pre-Halving Sales by Miners

Bitcoin Halving Analysis

Anticipating a price drop (per Bitfinex), miners likely pre-sold holdings (CryptoQuant data shows a March decrease in Bitcoin sent to exchanges compared to February).

Bitfinex suggests two possible reasons for this pre-halving selling:

  • Funding Upgrades:¬†Miners might have sold some of their Bitcoin holdings or used them as collateral to upgrade their mining machinery and infrastructure. This would ensure they remain competitive in the increasingly complex and resource-intensive world of Bitcoin mining.
  • Maximizing Earnings:¬†Another possibility is that miners aimed to maximize their earnings before the halving by selling some of their Bitcoin holdings while prices were still high.

The Dampening Effect of Bitcoin ETFs

US spot Bitcoin ETFs (offering exposure without direct purchase) might have also eased the halving impact.

Bitfinex highlights the significant inflows into these ETFs, reaching $192 million in Bitcoin investment product outflows last week. This large-scale institutional demand can significantly influence market sentiment and potentially drive prices upwards.

ETF demand, unlike most assets, can rise independently, potentially boosting Bitcoin prices despite the halving’s supply cut.

Looking Ahead: Continued Demand and Price Appreciation?

ETF buying by issuers outpaces new coin creation (Bitfinex). Analysts expect this to continue, tightening supply (squeeze). While inflows have slowed, they still outweigh daily new supply. This supply-demand imbalance, with ongoing ETF interest, could fuel Bitcoin price gains in the coming months.


The recent Bitcoin halving event did not result in the anticipated price drop, thanks in part to strategic pre-halving sales by miners and the introduction of U.S. spot Bitcoin ETFs. The short-term price resilience of Bitcoin suggests a brighter future than some predicted, although the long-term impact of these factors remains unclear.

Related Read: Bitcoin Halving Countdown: Is Now the Time to Invest?

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