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Bitcoin Halving Price Anticipation Rises Following Impact of Israel Retaliation on Iran

Last Updated April 19, 2024 12:52 PM
James Morales
Last Updated April 19, 2024 12:52 PM
By James Morales
Verified by Peter Henn

Key Takeaways

  • Positive market sentiment surrounding the Bitcoin halving has dampened following escalating tensions in the Middle East.
  • However, the cryptocurrency’s price has rebounded from a low of $59,700.
  • On the day of Bitcoin’s halving, Israel fired retaliatory missile strikes into Iran.

After nearly a week of trading downward, the price of Bitcoin has rebounded by around 8%. This upward move came after it dropped to a monthly low of $59,700 in the early hours of April 19.

Political tension in the Middle East is higher than it has been for years amid tit-for-tat missile volleys between Israel and Iran. Therefore, financial markets are experiencing high volatility. But for Bitcoin, the the cryptocurrency’s looming halving further compnounds the macroeconomic background.

Bitcoin Halving: The Final Countdown

At the time of writing the Bitcoin blockchain stood at a height of 839,919 blocks. This is less than 1,000 blocks shy of the 840,000 block juncture at which mining rewards will cut in half.

The crucial moment should now occur shortly before midnight (UTC) today, April 19 2024.

Previous halvings have been characterized by a short, sharp price spike at the moment of occurrence. But these have typically been corrected within an hour or two.  

Market sentiment going into the halving is also very different this time around, when the pre-halving rally fizzled out more than a month before the event itself.

As for the days and weeks ahead, in the past, volatility around the halving was short-lived and followed by a more prolonged period of sideways trading.

But the current macroeconomic and geopolitical climate suggests there could more more choppy waters ahead.

Middle East Tensions Ramp up Uncertainty

Commenting on the events of the past week, Jag Kooner, Head of Derivatives at Bitfinex observed that the sentiment surrounding Bitcoin’s upcoming halving “was notably optimistic until a week ago, with many expecting a significant price surge.” 

However, “with last weekend’s de-leveraging event, following the launch of missiles and drones towards Israel from Iran,” he noted that “sentiment has taken a turn for the worse.” 

With the conflict facing further escalation, he said: “It remains to be seen if this will affect fundamentals but sentiment is decidedly more cautious now.”

Miners Hoard BTC

Tensions between Israel and Iran appear to have cast a cloud of uncertainty over financial markets. However, major Bitcoin miners are banking on the cryptocurrency’s price rising above $80,000 once the anticipated post-halving bull run kicks in.

That represents double the current average cost of mining one Bitcoin using an Antminer S19 XP, a popular industrial mining unit used by firms like Marathon Digital.

To keep their operations ticking until mining becomes profitable again, Marathon, Riot and other large Bitcoin miners have stockpiled BTC worth $2.8 billion.

Many miners are currently sitting on unrealized profits from March. Recent bearishness may have cut into these profits, but it has not completely wiped them out. But companies can’t hold on to their reserves for too long without the reduced cash flow introducing operational risk.

The biggest players are almost certainly prepared to weather a few months of flat or negative BTC price growth. But if, for any reason, the current cycle breaks with historical trends and the halving doesn’t catalyze a major rally within nine months, their entire business model could be in jeopardy.

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