Why does VeChain CEO Sunny Lu believe Bitcoin halving is losing relevance?

As the 2024 Bitcoin halving event approaches, the cryptocurrency world stands on the brink of what could be a historic turning point. These expectations are not mere guesses. It is based on the evolving dynamics of the regulatory environment, institutional adoption, and changing paradigm of blockchain technology. Against this background, VeChain CEO Sunny Lu A respected figure in the blockchain community, he sheds light on the unique circumstances surrounding this year’s halving and its potential to redefine Bitcoin’s trajectory.

upcoming halving is poised to halve the reward for mining Bitcoin transactions from 6.25 BTC to 3.125 BTC, marking the fourth instance of a programmed supply reduction.

Historically, these events have catalyzed significant bullish movements within the market, guided by the basic economic principle that supply is decreasing while demand is steady or increasing. However, Lu points out that the halving situation in 2024 is significantly different from previous situations due to the strengthening of regulatory frameworks and institutional intervention in the cryptocurrency space.

March 2024, Bitcoin has reached an all-time high (ATH)., Lu believes it is a powerful combination of regulatory approval for spot ETFs and surging institutional interest. Even before the halving effect on supply declines, these unprecedented market conditions suggest a departure from traditional halving cycle dynamics.

“This year’s halving will be different from previous halvings because of the operating context,” Lu emphasizes.

Reduced half-life impact Lu’s other focuses on Bitcoin’s supply and demand dynamics include: He observed that the reduction in block rewards, while still significant, provides a proportionally smaller reduction compared to previous halvings. This trend represents a gradual shift towards the irrelevance of halvings within the broader context of Bitcoin’s evolution, highlighting the maturation of the market and its mechanisms.

Lu also highlights the increasingly pivotal role of regulatory developments in shaping the cryptocurrency landscape.

The previous cycle, represented by two ATHs following the 2020 halving, highlighted the impact of regulatory milestones such as the Coinbase IPO and the approval of the BTC futures ETF. According to Lu, these events not only fueled the price surge, but also demonstrated the growing impact of regulatory frameworks on Bitcoin adoption and valuation.

Essentially, the 2024 Bitcoin halving is unfolding. Within a significantly transformed ecosystem where the interplay of regulatory progress and institutional participation is reshaping market dynamics. The event symbolizes a technical milestone for Bitcoin’s programmed scarcity, while also reflecting a broader shift toward mainstream acceptance and the subtle influence of external economic and regulatory forces.

As the countdown to halving continues, Lu’s insights serve as a reminder of the complex factors at play in Bitcoin’s ongoing story. With the cryptocurrency industry at a crossroads, the 2024 halving could mark the start of a new chapter characterized by greater mainstream integration and the diminishing importance of traditional supply constraints.

Also Read: Is Bitcoin Price Near Its Peak With Halving?