Bitcoin Miners Could Sell Post-Halving: Will BTC Fall Back to 2023 Levels? Peter Schiff Says it Will

Key Takeaways

• Bitcoin and altcoins plunged after hawkish Fed comments and rising tensions between Iran and Israel.
• The total crypto market capitalization shed over $400 billion in a day, falling from $2.8 trillion to $2.35 trillion.
• Even gold, a traditional safe haven, saw a price decline, adding complexity to the safe-haven narrative.

The last few days marked a departure from the recent calm experienced in the cryptocurrency market. Bitcoin and altcoins have faced significant declines, likely influenced by recent statements from several United States Federal Reserve presidents and reports of escalating tensions between Iran and Israel.

As a result, BTC’s price has seen a sharp drop, with altcoins experiencing even steeper losses.

Turbulent Weekend Amidst Geopolitical Tensions

This market downturn could be seen as an ideal moment for critics like Peter Schiff, known for his pessimistic views on cryptocurrencies, to renew their criticisms.

However, it’s important to note that gold, often touted by Schiff as a safer investment, also experienced a price drop when markets opened yesterday.

Peter Schiff recently highlighted Bitcoin’s significant price drop. He pointed out that it has fallen to slightly above $61,000, or 26 ounces of gold. This is a 30% decline from two-and-a-half years ago when one Bitcoin was valued at 37 ounces of gold. Schiff’s comments suggest that Bitcoin, when measured against gold, is experiencing a bear market.

According to Markus Thielen, head of research at 10x Research, Bitcoin miners might sell off approximately $5 billion worth of BTC following the upcoming halving, an event anticipated to occur around April 20.

Thielen’s analysis, shared in an April 13 analyst note, suggests that the impact of this potential liquidation could extend over four to six months, likely keeping Bitcoin prices stable without significant gains.

This trend aligns with previous patterns observed after halvings, such as in 2020 when Bitcoin prices remained confined between $9,000 and $11,500 for five months post-halving. Thielen predicts a similar “summer lull” this year, indicating that the crypto market might not experience any major price increases until around October, based on historical trends.

Crypto Market Cap Dives Over $400 Billion Amid Fed Statements

The total market capitalization of all cryptocurrencies has taken a severe hit, plummeting by more than $400 billion in just over 24 hours, now standing at $2.350 trillion, according to CoinMarketCap.

This sharp decline from $2.8 trillion a day ago is down to several factors. Notably, a red Friday emerged following comments from the United States Federal Reserve officials indicating that interest rates would not be lowered in the near future.

Adding to the market’s volatility, geopolitical tensions have escalated. Recent developments involve Israel and Iran, contributing to today’s market crash. A few weeks ago, reports surfaced that Israel had eliminated a senior Iranian commander in Damascus, Syria. Following this, news broke of Iran preparing a counter-strike, including the seizure of an Israel-linked cargo ship by Iran’s navy. In response, Israel’s military has been on full alert, with certain operations suspended, indicating heightened preparedness for potential conflicts.

US on High Alert as Biden Returns Early

The United States has heightened its alert status following President Biden’s unexpected early return from Delaware this weekend. The Pentagon has reported that US Defense Secretary Lloyd Austin is in direct contact with Israeli counterparts to address “urgent regional threats”.

This development comes during escalating tensions and recent events involving Iran and Israel. The US government’s swift actions highlight the seriousness with which it is taking the potential risks in the region.