Bitcoin Halving: Market Predictions and Investment Insights

Expectations for Bitcoin’s Halving

Cryptocurrency bull cycles developed differently. The last two bull markets lasted 3.5 years. We are 1.5 years into the current cycle. In the last two bull markets, prices increased by 113 times and 19 times. Prices have increased 4 times so far.

A recent report by cryptocurrency manager Galaxy Digital revealed three views on the impact of the BTC halving. The report noted that the halving caused a supply shock post-event, contributing to price increases. It also emphasized that the halving reduced miners’ selling pressure. The analytics firm stated:

The reduction in selling pressure within the mining community led to an increase in Bitcoin’s value after the November 2012, July 2016, and May 2020 halvings, and the fourth halving could do the same.

“Bitcoin Already Felt the Impact”

Contrary to assumptions, the bearish view sees the next halving event as a “sell” event. For the first time in the current cycle, BTC is trading close to its all-time high before the halving. Therefore, the bearish group believes that the halvings are already priced in. The company report stated:

At this point, BTC experienced a drop of over 42% from previous all-time highs before the last two halvings. In fact, the bull runs in 2017 and 2020 had not yet started at this stage in Bitcoin’s supply schedule.

Additionally, bears argue that the halving will affect many miners and could make the network less secure. However, there is also a third group of analysts who find the halving negligible. According to these views, BTC’s price is influenced by demand and overall macro conditions. BitMEX founder and CIO of crypto fund Maelstrom, Arthur Hayes, expressed similar views in a recent interview, stating:

Why are institutional investors investing in Bitcoin? Because there’s a scenario that started with the Fed raising interest rates in March 2022, fundamentally due to the collapse of the government bond market. So, there’s a reason people are turning to Bitcoin, not just because it exists.

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