How Bitcoin Halving Impacts Alt-coins?Bitcoin halving is around the corner. Everyone associated with the crypto market is excited with the event.The halving event happens after the interval of four years. In the past halving events, the price of Bitcoin has soared exponentially. After each halving, Bitcoin had made a new all time high in the past. Can we hope that this halving event of 2024 would behave similarly? only time will tell!
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Since most of the small investors does not have large funds to invest in the bitcoin, they are more comfortable with the alt-coins. It is also fact that returns in alt-coins would be much higher than investing in bitcoin. But, it is also true that altcoins are more risky and volatile as compared to bitcoin. So investing in the altcoins needs a proper strategy. This includes investing at the right time in the fundamentally strong projects.
Though the halving event is related to the bitcoin, it has its impact on altcoins as well. It would certainly impact the fundamentals of the bitcoin like its supply and demand. Since, bitcoin is the parent currency and leads all other cryptocurrencies, any change in the behavior of bitcoin is reflected in the altcoins.
So the bitcoin halving event holds as much significance for the altcoins. Let’s see how altcoins would be impacted by the halving of bitcoin.
How Bitcoin Halving Impacts Alt-coins?
1. Favorable market sentiments-
With each halving event of bitcoin there has been a boom in the crypto market. It has boosted the confidence of investors in the market. In the bull market the money flows from the bitcoin towards altcoins which show major price jumps after their volume increases. Altcoins with strong fundamentals
and a dedicated team are the choice of real investors.
The projects dealing with the Artificial Intelligence are considered to be the game changer in the upcoming bull run. Here we have have covered THE TOP 10 AI COINS that you can’t afford to miss past the halving event.
2. Decline of Bitcoin Dominance-
The process of halving declines the dominance of bitcoin. Low dominance of bitcoin means that major inflow of money in altcoins. The halving event decreases the rewards of miners.The bitcoin mining becomes more difficult and less rewarding. This is why the investors redirect their capital towards altcoins which are strong and more profitable.
Here you can take a lesson before investing in the altcoins. Investing in altcoins is profitable when bitcoin dominance is in the declining trend and vice-versa.
3. Catalyst for Innovation-
The bitcoin halving upgrades the technology stack of bitcoin. Upgrades in the technology stack of bitcoin acts a blueprint for the altcoins. Thus they advance in technology upgrades with bitcoin. This adds to the fundamentals of the altcoins, having more utility, secure and scalable.
Real World Assets are entering into the crypto-space making them the innovation of future investments in digital assets. Try to understand What are Real World Assets and some strong projects in RWAs in crypto?
4. Blockchain Forks of Altcoins-
Sometimes the halving event of bitcoin leads to the forks in the blockchain network.There is a chance of emergence of new altcoins from such forks which are unique in their functionality.Take an example of LTC (Litecoin), which is the product of bitcoin fork offering faster block generation times.
It is, therefore, important to keep an watch on such developments during the bitcoin halving for more profit.
5. Increased Market-cap-
To reap maximum benefits from halving and the fore-coming bull market, investors diversify their funds in major altcoins. The inflow of funds into the altcoins increase their market cap and hence their price. Coins with high market cap are considered as strong and hot investments.
Way Forward
One thing is clear that the cryptocurrencies will see the price rally after the bitcoin halving is over. The price action does not necessarily coin side with the event. We may see a dump just around the event and this where the strong coins can be bagged at very lower prices.
When the money starts to flow towards the altcoins they would show a big price rally and it would be the time to book profits. When other people would be buying the altcoins at higher prices, those who bought early and remained patient would be selling their coins. Cheers!