The impact of Bitcoin’s halving on cryptocurrency prices is often overestimated, and the outcome of the next halving, scheduled for April 2024, may be different from previous ones, a leading analyst says.
The halving event, which occurs every four years, will cut the rate at which new Bitcoins are created in half, and is often cited as one of the main catalysts for Bitcoin’s biggest gains.
However, despite the optimistic rhetoric surrounding the halving, the event itself does not guarantee Bitcoin’s appreciation.
If a reduction in the supply of new Bitcoins is not accompanied by huge demand, then prices are unlikely to surge.
Furthermore, the halving is a completely predictable event: this means that all market participants know in advance when the halving will occur, so current prices may already reflect the impact before the halving occurs.
“The things we most expect often don’t happen,” Bloomberg analyst Mike McGlone said of the highly anticipated event.
“That’s what I’m concerned about. It’s completely consistent,” he continued.
Furthermore, with each halving, its impact on the supply of new Bitcoins decreases; over time, its impact will eventually become irrelevant. Therefore, changes in demand, rather than changes in supply, are becoming the dominant factor affecting Bitcoin prices.
So, how will the next Bitcoin halving affect the crypto market? And, if not the halving, what is the catalyst behind Bitcoin’s cyclical rise? To find out, check out our latest Cointelegraph report on our YouTube channel and don’t forget to subscribe!
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