A prominent analyst suggests that the upcoming Bitcoin halving, scheduled for April 2024, may have a different effect than previous halvings, as the impact of this event on crypto prices is often exaggerated.
The halving is an event that occurs every four years and reduces the rate at which new Bitcoin (BTC) is created by half. This event is typically considered a key driver behind significant price increases for Bitcoin.
However, it is important to note that the halving alone does not guarantee price appreciation for Bitcoin. If the decreased supply of new BTC is not met with substantial demand, prices are unlikely to see a significant surge.
Furthermore, the halving is a predictable occurrence, and all market participants are aware of when it will happen. Consequently, the impact of the halving may already be priced into the market before it occurs.
“Things that we most anticipate generally don’t happen,” stated Mike McGlone, an analyst at Bloomberg, expressing concern about the highly anticipated event.
McGlone continued, “And that’s what I’m concerned about. It’s complete consensus.”
Additionally, with each halving, the impact on the new Bitcoin supply diminishes. Over time, the halving’s effect will eventually become inconsequential, as argued by the analyst. Consequently, changes in demand, rather than supply, will become the dominant factor influencing the price of Bitcoin.
So, how will the next Bitcoin halving affect the crypto market? And if it’s not the halving, what are the main catalysts for Bitcoin’s cyclical price increases?
Image Source: Pierre Borthiry – Peiobty@Unsplash
