Analyst Says Bitcoin Halving Influence Is No Longer Driving Price, Here’s What Is

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10 Apr 2024

Analysts from CryptoQuant have revealed that the influence of the 2024 Bitcoin halving on the price of BTC has notably diminished. According to the crypto analytics firm, the highly anticipated halving event is no longer the key driver for a bullish momentum in BTC.

Bitcoin Halving Effects On Prices Is Fading

CryptoQuant wrote in a recent research report that the upcoming Bitcoin halving event scheduled this April may not deliver the desired price shock expected by most crypto analysts and investors in the space.
According to the analytics firm, the influence of the Bitcoin halving event has been dwindling over time, with the price of the cryptocurrency and a potential bullish rally being driven by a new change in market dynamics.

Notably, CryptoQuant disclosed that the demand from long-term and large-scale investors, whales, has become one of the primary factors pushing the price of BTC upward. The Head of Research at CryptoQuant, Julio Monero disclosed on Tuesday, April 9, that the demand for Bitcoin from permanent holders has recently outpaced issuance for the first time in history.
In its report, CryptoQuant also highlighted an 11% month-on-month increase in large-scale Bitcoin investors holding between 1,000 to 10,000 BTC, reaching unprecedented levels. This elevated demand is in sharp contrast with BTC’s supply dynamics and is poised to increase further after the halving event concludes.
Currently, long-term Bitcoin holders are accumulating more tokens than the new investors entering the market. CryptoQuant revealed that permanent holders have also been adding as much as 200,000 BTC to their portfolio every month while long-term holders are amassing seven times more BTC per month.
“We argue that the effect of the halving has been diminishing, as the new issuance of Bitcoin gets smaller relative to the amount of Bitcoin selling from long-term holders,” the analytics firm wrote.

Analysts Remain Optimistic About Halving Influence

Despite CryptoQuant’s report on Bitcoin’s supply and demand dynamics, numerous analysts still expect a significant uptick in Bitcoin’s price following the halving event. Analysts like Joe Consorti have predicted BTC’s price to rise to $100,000 following the Bitcoin halving. Additionally, he has expressed optimism about a potential bullish rally for the cryptocurrency during this period.

Moreover, due to historical trends revealing a correlation between the Bitcoin halving event and a price surge for the cryptocurrency, various crypto investors have predicted a similar bullish outlook for the cryptocurrency this year.
BitStarz Player Lands $2,459,124 Record Win! Could you be next big winner?

Recently, open interest in Bitcoin surged to new all-time highs above $18 billion. This increase suggests that traders and investors are still bullish on Bitcoin’s future value, seeing any price dips as buying opportunities before a potential rally.

BTC bulls lose out to bears | Source: BTCUSD on Tradingview.com

Featured image from Earth.org, chart from Tradingview.com
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

Ethena (ENA) Is ‘The LUNA Of This Cycle’ With 20x Potential: Expert

Charles Edwards, the founder of Capriole Investments, has sparked significant interest and debate within the cryptocurrency community. He heralded Ethena (ENA) as “the Luna of this cycle,” but with a crucial difference: its economic fundamentals are deemed sustainable.
Edwards elaborated, “It’s 100% collateralized and the yield is variable based on market forces. Two things Luna wasn’t.” He also noted that at its zenith, Luna’s valuation exceeded ENA’s current market cap by more than twenty-fold, yet he cautioned, “ENA is not risk-free, custody and execution risk exist.”

Ethena is the Luna of this cycle, except the underlying economics are actually sustainable. It's 100% collateralized and the yield is variable based on market forces. Two things Luna wasn't. At it's peak LUNA was over 20X bigger than what ENA is now. ENA is not risk free, custody…
— Charles Edwards (@caprioleio) April 10, 2024

Since its launch on April 2, ENA has seen a meteoric rise from under $0.30 to a high of $1.45. This rally is largely attributed to Ethena Labs’ strategic enhancement of its rewards program, now in its “Season 2,” which offers a 50% reward boost for users locking their ENA tokens for at least seven days. This move aims to bolster user engagement and loyalty, fostering a sustainable ecosystem for the Ethena platform.

A remarkable aspect of this ecosystem is the rapid growth of its stablecoin, USDe, which has outstripped the supply growth of established counterparts such as USDT, USDC, and DAI, reaching a $2 billion supply in just over 100 days.

USDe is the fastest growing USD denominated asset in the history of crypto pic.twitter.com/xgiRJjf96t
— G | Ethena (@leptokurtic_) April 8, 2024

However, the project’s high yields which are generated by harnessing the derivative markets and staked Ethereum have stirred skepticism among industry experts. Fantom founder Andre Cronje, among others, has raised concerns about the sustainability of these yields, which are the highest in the entire crypto industry.

Risks Involved With Ethena

Noteworthy, ENA is often compared to Terra Luna (LUNA), but the differences could not be much bigger, as Edwards also noted. While ENA is not risk free, a demise like the one of LUNA is highly unlikely. Despite that, investors need to be aware of other risks involved with ENA.
Diving deeper into the discussion of risks, CL (@CL207) from eGirl Capital offers an intriguing perspective on the behavior of derivatives traders. She clarifies, “It appears Ethena is making many people who don’t trade derivatives have a really hard time wrapping their heads around the fact that derivatives traders are so genuinely retarded that we’re willing to pay like 50%+ APR to enter a position.”

Notably, last cycle crypto traders were bidding futures so high that Bitcoin quarterlies earned “a locked-in >50% apr. She added, “just 50 days into 2021, we collectively paid 2,400,000,000$ in funding rates by the end of 2021, the market has paid as much as a decently sized country’s GDP.”
Monetsupply.eth (@MonetSupply) from Block Analitica provides a granular analysis of the risks Andre Cronje highlighted. Through his examination, several key areas of concern are outlined:

Oracle Risk: The potential impact on exchange positions due to Ethena providing inaccurate quotes on minting or redeeming operations. However, MonetSupply notes, “there’s rate limits on this tho so max loss is constrained and counterparties are all whitelisted (can’t just run away with the money).”
Liquidation Risk: Deemed not a significant factor as the portfolio is leveraged less than 1x, suggesting a conservative approach to borrowing and leverage.
Spread Risk: The possibility of increased basis leading to higher funding revenue, which should theoretically attract inflows. Conversely, a negative basis might cause outflows, but Ethena could benefit from closing hedged positions profitably.
Collateral Ratio Risk: Even though liquid staking tokens (LSTs) are given less than 100% weight on centralized exchanges (CEX), the overall low leverage mitigates this risk. The proportion of LST in spot collateral is relatively minor.
Custody Risk: Highlighted as one of the more significant concerns, given the reliance on custodians with a good track record and the distribution of assets across multiple entities.
Exchange Solvency Risk: This risk could lead to the loss of unsettled profit and loss (PnL) and some trading costs to rehedge on other exchanges. However, MonetSupply adds, “the Binance/ceffu nexus might change this assessment though, are they actually independent?”
Ethena Entity Risk: The internal risk related to Ethena’s keys or authentication tokens being compromised, or a team member acting maliciously.

MonetSupply concludes that despite these risks, the framework of overcollateralization on platforms like Morpho, the Maker surplus buffer, and the MKR backstop, supported by a substantial Proof of Liquidity (POL), serves as a robust mitigating factor.
At press time, ENA traded at $1.329.
ENA price, 2-hour chart | Source: ENAUSD on TradingView.com
Featured image from Bitget, chart from TradingView.com
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
Tags: Charles Edwards ENA Ethena Ethena News Ethena Price LUNA terra luna

From Hat To Heights: Dogwifhat’s $17 Crypto Leap Electrifies Investors

Dogwifhat (WIF) has been on a wild ride this week. As of Tuesday evening, its value surged by nearly 10%, however, the canine-inspired cryptocurrency could not sustain the momentum and by Wednesday, it lost 14% of its value.

Dogwifhat’s Aggressive Rise And Sudden Dip

The rollercoaster ride began with a bang. Dogwifhat, a newcomer to the meme coin scene built on the Solana blockchain, quickly drew investor interest. Its lighthearted name and association with the ever-popular dog meme trend fueled a buying frenzy, pushing its price up by double digits. This bullish sentiment echoed a wider trend in the meme coin market, which saw a 1.5% increase over the past week.
WIF’s price has risen by 90% during the past month, adding an enormous $0.32 on average to its present price tag. This rapid rise indicates that if the coin keeps growing, it has the potential to become a reliable asset.

WIF price action in the last month. Source:

CoinMarketCap

On March 29, Dogwifhat surpassed Pepe (PEPE) to become the third-largest memecoin by market capitalization, according to CoinMarketCap data.
However, the euphoria surrounding Dogwifhat proved short-lived. The broader Solana meme coin category, which includes WIF, witnessed a steeper decline compared to the overall meme coin market. This suggests factors specific to Solana meme coins, possibly network congestion or concerns about the platform’s scalability, might be contributing to the price drop.

WIF market cap currently at $3.3 billion. Chart: TradingView.com

Dogwifhat’s Future: A Lofty Prediction, But Is It Realistic?

Despite the recent dip, some analysts remain optimistic about Dogwifhat’s future. Changelly, a leading on-chain metrics and price prediction firm, has released a forecast that has set tongues wagging. Their prediction? Dogwifhat could reach a staggering $17 in the near future, representing a potential surge of a whopping 300% from its current price.

This rosy picture, however, comes with a hefty dose of caution. The cryptocurrency market is notorious for its volatility. Meme coins, in particular, are known for their meme-driven price fluctuations, often lacking the underlying utility or strong fundamentals found in established cryptocurrencies. While the potential for massive returns in meme coins exists, so too does the risk of significant losses.

On Bugs And Project Postponements

Meanwhile, as additional projects and customers have joined its ecosystem over the past month, Solana has experienced network congestion.
Anatoly Yakovenko, the co-founder of Solana, talked about the difficulties of “dealing with congestion bugs” on Twitter last Thursday. As a result of the congestion problems, several cryptocurrency projects have postponed token launches in the past few days.

solana’s current issue is not a design flaw, it’s an implementation bug
it is now hitting me that some folks might not understand what we’ve been trying to say by this for the past week
I’ll simplify it (intended for non-technical people)
it is important to make this… pic.twitter.com/fNZzu9f90S
— mert | helius.dev (@0xMert_) April 8, 2024

Reportedly, developers of Solana have scheduled the deployment of a patch for a “implementation problem” that has caused the network’s transaction failure rates to skyrocket on April 15.
According to Helius Labs CEO Mert Mumtaz, the current problem with the network is not a “design flaw,” but the “implementation bug.”
Featured image from Bybit, chart from TradingView
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
Tags: dogwifhat memecoins Solana WIF