Bitcoin investment to hit ‘pivotal moment’ this year

The world’s most popular cryptocurrency, Bitcoin (BTC), is set to hit a key milestone this year, with the anticipated halving event – set to occur within the next five days – and launch of spot BTC exchange traded funds (ETFs) earlier this year, culminating in unprecedented investor demand for the digital coin, according to a new survey by leading crypto exchange Binance.

“We have not seen market conditions like this ahead of a halving event before, and this is driving a lot of excitement amongst market participants, with more than 70% of our Australian users eager to see the impacts,” said Ben Rose, Binance’s general manager for Australia and New Zealand.

“With sky-high demand, record-breaking prices, and a bullish investor outlook, it is a pretty exciting moment to be in crypto,” Rose said.

Rose believes we are at a pivotal moment for Bitcoin, as institutional participants, including BlackRock and Fidelity – which launched their own spot BTC ETFs earlier this year – heightening interest among mainstream investors.

These launches were, according to Binance, the most successful ETF debuts on record.

Heightened investor demand has also driven BTC valuations to new all-time highs, exceeding US$73,000 (AU$110,000) per coin, which was reached in mid-March this year.

This is the first time BTC’s peak has immediately preceded a halving event.

More than two out of three (71%) of the 2,000 surveyed investors expressed bullishness over the continuing surge of Bitcoin’s value over the coming six months.

More than half expect the price of Bitcoin to increase as a direct result of the halving, with more than 80% believing the upcoming halving event would be a general positive for the industry.

Occurring approximately every four years, Bitcoin halving effectively cuts the reward for BTC mining by 50%. This year’s halving will see the block reward fall to 3.125 BTC.

By lowering the reward amount and enforcing scarcity, the Bitcoin halving effectively serves as a counter to inflation of the currency. By reducing the number of new Bitcoins introduced, demand for new Bitcoins is also seen to increase.

“Pleasingly, our Australian customers are incredibly clued up on the halving, with 85% self-rating as knowledgeable,” Rose said.

“The research findings also show halving has a positive impact on BTC trading, with almost 80% of Binance Australia users planning to increase their BTC holdings in the very near future, with just under half keen to do so before the anticipated halving later this month.”

For Rose, the halving event serves as an “important inbuilt inflationary hedge”.

“With only 21 million coins to ever exist, the asset mimics the scarcity of precious commodities, like gold. This is capturing the attention of institutional investors, who are increasingly recognising the crypto can play as part of a diversified investment portfolio.”

“We have an incredible opportunity here in Australia to continue to grow our digital asset industry, and popular events such as this are an ideal time to get more Australians educated and involved in crypto,” Rose said.