Binance CEO Richard Teng said that this year’s Bitcoin BTC +1.42% halving comes amid a positive backdrop for the cryptocurrency and the wider market in general.

“This year’s halving is unique in that it comes amid a series of other significant events in the Bitcoin and wider crypto ecosystem,” Teng told The Block in written comments.

“In addition to the ETF breakthrough, which has spurred institutional interest and participation, another major current in crypto today is the boom of the Layer 2 and DeFi activity on the Bitcoin network, fueled by the popularity of the Ordinals protocol and Bitcoin inscriptions,” he added.

Teng noted that bitcoin’s price has historically increased during the six months following each halving event. The halving occurs every four years and cuts the number of bitcoin rewards given to miners in half. He said this reduced supply of new coins may be behind the market’s reaction to each event. 

However, he noted that the room for further growth depends on a range of factors, including overall market sentiment and rates of adoption. He added that the bitcoin ETF approvals have already driven up demand for bitcoin and increased its reach. 

“While the points above amount to an optimistic outlook for BTC and the crypto market in general, it is important that investors, especially newcomers to the crypto space, manage their expectations,” Teng said. “Immediate price shifts in the wake of the halving are not warranted, and its fundamental importance will manifest itself in longer trends in value, liquidity, adoption, and crypto’s standing and acceptance as an asset class.”

The bitcoin halving is set to occur tonight, with the rewards per block decreasing from 6.25 BTC to 3.125 BTC for the next four years. Make sure to watch the countdown here.