For the deputy CEO of the domestic crypto platform Bitpanda, Lukas Enzersdorfer-Konrad, this is primarily a “psychological event” that is fueling demand for the currency and thus the price.
- Bitcoin-Halving: Halving takes place cyclically every four years. The reward for mining new Bitcoins, which miners receive in exchange for their computing power, is halved. This is paid out directly in Bitcoin.
- Halving event trigger is the creation of 210,000 new Bitcoin blocks. This year this will probably happen on April 20th, although an exact date cannot be determined in advance. This is because individual blocks are mined variably and the exact time of the halving can only be estimated.
- Regulation and inflation prevention: The halving is firmly anchored in the code of the cryptocurrency and serves the purpose of regulating the production of new coins and preventing inflation – according to the Bitcoin algorithm, their total number cannot be more than 21 million.
In addition to the increased market expectations for price developments, the halving also means fewer coins will come into circulation. The price rally in recent months is the result of a combination of higher demand and the prospect of lower supply. “This results in an adjustment of the economic curve and thus – as is usual in markets – a higher price,” says Enzersdorfer-Konrad.
Unpredictable price development
According to the expert, however, there are other reasons for the price fireworks: On the one hand, the introduction of an exchange-traded fund (ETF) based on Bitcoin opened the market for institutional investors. On the other hand, a new set of regulations – the “Markets in Crypto Assets Regulation” (MiCAR) – came into force in the EU last June. According to the manager, this creates regulatory clarity for banks and other financial institutions and makes it easier for them to deal with cryptocurrencies.
It is of course unclear whether there could be further price jumps after the halving. According to Enzersdorfer-Konrad, however, this is certainly possible. The event has already been largely priced in. However, there have always been increases in the months following the previous four halvings. That makes this year’s event all the more exciting, he said.
After a long dry spell, the Bitcoin price had increased continuously since October 2023 before breaking the threshold of 72,000 dollars (approx. 67,000 euros) in mid-March this year with a new all-time record. Most recently, Bitcoin was only slightly lower at a good 66,000 euros.
- Podcast: In the OÖN podcast “Money & Life”, Florian Wimmer explains why Bitcoin has come to stay in the long term. Wimmer is the founder and managing director of the company Blockpit, based in the Linz tobacco factory. >> To the OÖN podcast
Other cryptocurrencies also benefit
In addition to the rise in Bitcoin, the price of the second largest cryptocurrency by market capitalization, Ethereum, also rose sharply recently. According to the Bitpanda manager, the reason for this is the strong interconnectedness of the industry. This is roughly comparable to other capital markets: If the situation – driven by macroeconomic trends – is good, many stocks often increase in value at the same time.
Enzersdorfer-Konrad does not want to let the criticism often leveled at cryptocurrencies that they are driven purely by market noise and have no intrinsic value stand. There are indeed such currencies, such as “community projects” like the one surrounding Dogecoin. However, the majority of currencies are used to finance technology projects based on blockchains, which, according to Enzersdorfer-Konrad, form the basis for new digital infrastructures – similar to how the TCP/IP protocol was crucial for the development of the Internet back then.
According to the manager, there is definitely a use case and therefore exciting investment opportunities. Potential investors should still take into account the high volatility of cryptocurrencies. Although the return expectations for this asset class are high, the investment also carries a high risk of loss.
Business is going well for Bitpanda itself. The company has long since recovered from the turbulence surrounding the “crypto winter”, which hit the market and with it the Austrian company in 2022 after the outbreak of war in Ukraine. Bitpanda is currently “better positioned than ever before in the company’s history; last year was very profitable.” Bitpanda was founded in Vienna in 2014 and has since established itself as one of the largest crypto brokers in Europe. There are currently 700 employees employed there.
Crypto assets have experienced a surge in recent months. Florian Wimmer is the founder and managing director of the company Blockpit, based in the Linz tobacco factory.
