One analyst said the Bitcoin halving will not be reflected in prices and that the event will see “substantial changes” in the digital asset’s supply and demand mechanisms.
Matt Ballensweig, Head of BitGo at Go Network, added new insight to the numerous speculations about whether the halving has already been priced in.
“Digital asset investors and traders are constantly asking the question, ‘Is the halving priced?’ and with each cycle it tends to be that it is not. Likewise, many investors assumed that spot Bitcoin ETF approvals were also priced in, but ETF trading Bitcoin price rose significantly in the first 60 days of .” Ballensweig said in an email to The Block.
Halving would see ‘substantial changes’ in Bitcoin supply and demand
Ballensweig explained that certain events trigger real changes in supply and demand dynamics within exchange order books, and argued that the upcoming halving will demonstrate this trend.
“These specific events lead to material changes in the supply and demand mechanisms of exchange order books. When a spot Bitcoin ETF was approved, there was committed capital ready to flow into that product, which created bid-side pressure to determine what “It appears that trading activity is leading up to the event,” he said.
Ballensweig added that the upcoming halving will see traders attempting to position themselves ahead of the event. “However, if an event occurs, the daily supply on the exchange order book will be reduced and, assuming there is continued demand, pressure will again be put on the bid side as the sell side has become thinner,” he added.
Coinbase analysts say this halving is different.
Ballensweig’s views contrast with those of Coinbase analysts David Duong and David Han. In a note to The Block in early April, they argued that the upcoming halving is different from previous events, not long after Bitcoin surpassed its all-time high of $73,000 in mid-March.
“This is the first halving cycle in which Bitcoin has hit all-time highs before the halving, which could mean the effect has already been priced in by savvy traders,” Coinbase analysts said.
The expected Bitcoin halving is expected to occur on Saturday, April 20, according to The Block’s Halving Countdown.
Upcoming Bitcoin Halving Event
Every four years, a mechanism coded into the Bitcoin blockchain halves the block reward miners earn.
This means that each new Bitcoin block mined roughly every 10 minutes yields 3.125.Currently reduced from 6.25 BTC
-4.73%
Block rewards.
Historically, many of Bitcoin’s gains occurred 12 to 18 months after the halving. At this time, the newly declining supply was accompanied by a surge in demand. For example, at the time of the halving in 2020, the price of one Bitcoin was less than $10,000. At its peak in 2022, the price rose to over $67,000.
What is different in this case is that demand has surged with the emergence of 11 spot Bitcoin ETFs.
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