With Bitcoin’s upcoming halving scheduled to happen around 9 p.m. ET today, as the miners’ block subsidy reward reduces from 6.25 BTC to 3.125 BTC, we reached out to various industry firms to gauge their perspectives on the potential impact it may exert on Bitcoin’s price movement.
Bitcoin halvings, also known as “halvenings,” have been linked to notable fluctuations in the cryptocurrency’s price. Although they don’t directly cause price movements, these events have frequently preceded significant bull runs in the Bitcoin market.
“Historically, Bitcoin has witnessed noteworthy price surges in the six months following each halving event. Remarkably, Bitcoin achieved new all-time highs in each four-year cycle between the previous halving events.”
Kraken’s Head of Strategy, Thomas Perfumo, posed the key query, stating, “The main question everyone has is how will the Bitcoin price respond to the halvening this time around? Perhaps the market cycle is commencing earlier, but historical trends indicate that we haven’t yet reached the culmination of the cycle.”
Nansen research analyst Aurélie Barthere concurred that Bitcoin’s price returns following halvings were typically superior, showing five to six times greater returns in the 250 days post-halving compared to other years. “Currently, the macroeconomic factors, such as high U.S. rates for a longer period, are triggering a correction in risk assets, including crypto. However, our primary scenario is that the upward trend remains intact for Bitcoin,” Barthere stated.
Greg Beard, CEO of Stronghold Digital Mining, added, “While some analyze Bitcoin’s price from a technical standpoint and forecast an increase, I focus on the fundamental principles of supply and demand and arrive at the same bullish conclusions.”
Has the halving already been factored into the price?
The inquiry into whether the Bitcoin halving is already factored into the market is a recurring discussion each time the halving approaches. However, unlike previous halving cycles, Bitcoin surged to a new all-time high of $73,836 before the fourth halving on March 12. Analysts at the cryptocurrency exchange Coinbase suggested earlier this month that this price action made a compelling argument for the halving being priced in this time around.
JPMorgan, the investment bank, shares this sentiment. “We do not anticipate Bitcoin price surges post-halving as it has already been factored into the market,” analysts led by Nikolaos Panigirtzoglou stated in a report on Wednesday, reiterating their previous stance. “In fact, we foresee potential downside for the Bitcoin price post-halving due to several factors.”
Their rationale includes Bitcoin still being in “overbought conditions,” as indicated by an analysis of open interest in Bitcoin futures. Furthermore, the Bitcoin price remains significantly above JPMorgan’s volatility-adjusted price of $45,000 in comparison to gold and stays above its projected production cost post-halving of $42,000, the analysts emphasized.
Contrarily, others hold a different view. John Glover, a former Managing Director at Barclays Bank and current CIO at crypto lending platform Ledn, cautioned market participants to exercise patience. He argued that the decrease in new supply will require time to manifest its impact on the market.
John Glover emphasized, “While many participants are examining the historical impact of halvings on the BTC price, few are discussing the typical timeframe for this impact to materialize. Historically, peak prices (preceding significant corrections) have occurred between 10 and 16 months following each halving event. The crucial factor here is patience, yet as we are aware, individuals often struggle to allow their profits to accumulate.”
Samson Mow, CEO of the bitcoin technology company JAN3, added, “This halving will instigate a substantial supply shock to the system. Considering current U.S. ETFs at 5-10 times the daily supply, the post-halving demand could potentially surge to 10-20 times the available supply.”
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