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Sky-high Bitcoin ETF flows and several price rallies mean that the next Bitcoin halving is now projected to take place on April 15—not the meme-friendly 4/20 that it once was.
That's bad news for meme fans who liked the idea of celebrating the halving and their affinity for weed on the same day. But it's also good news and a telling indication of trader sentiment.
Just a month ago—on Valentine's Day, no less—Decrypt wrote about the very meme-friendly hypothetical situation that Bitcoin might reach $69,000 and have its halving occur on 4/20. Bitcoin hit that price target on March 5.
But why has the halving has moved up by a few days? It's because of the Bitcoin network's finite block space and the fact that the halving is scheduled to occur at block height 840,000—or after the network has processed 840,000 blocks worth of transactions. At the time of writing, the BTC network is at a current block height of 834,194.
Each block on the Bitcoin network has room for roughly 2,700 transactions. So when there's a lot of transactions being processed on the network—like when there's a new all-time high, a sudden crash after that rally, one of the largest exchanges crashes, then BTC sets another new all-time high, and then another one—the network has more transactions to process than usual.
For the sake of context, up until February 14, the average daily volume of BTC was $24 billion, according to CoinGecko data. Of course, there was much higher volume on January 11—approximately $52 billion—when 10 new spot Bitcoin ETF applicants began trading in the U.S.
Things quieted down afterwards when Bitcoin saw a lot of downward pressure because funds were being withdrawn from Grayscale Bitcoin Trust (GBTC). The way a Bitcoin-backed ETF works, when investors redeem their shares, the issuer gives them cash and then sells the BTC that was backing the shares.
By late January, JP Morgan analyst Nikolaos Panigirtzoglou estimated that GBTC had seen $4.3 billion worth of outflows since it had been converted into a spot Bitcoin ETF.
But since mid-February, the average daily volume has ticked up to $40 billion worth of BTC. If you look at the average daily volume since the start of March, when Bitcoin started making moves towards setting a new all-time high for the first time since 2021, it's more like $52 billion. The big outlier there is Wednesday, March 6—the day after the initial ATH news last week—when close to $100 billion worth of Bitcoin changed hands in a single day.
Editor's note: This article incorrectly stated the Bitcoin volume on March 6. The error has since been fixed.
Edited by Andrew Hayward