Bitcoin Halving Not Priced Into Crypto Market, Analyst Says 

Bitcoin Halving Not Priced Into Crypto Market, Analyst Says 

As the Bitcoin halving event approaches, there have been different opinions about how the event may affect the crypto market.

Many analysts have said that the event is already priced in, and investors shouldn’t expect any more effect in the future.

However, BitGo Head of Go Network Matt Ballensweig has a different opinion on the matter. Speaking to The Block, he said the halving has not been priced in. 

“Digital asset investors and traders constantly ask the question ‘is the halving priced in’ and each cycle it tends to not be. Similarly, many investors thought the spot bitcoin ETF approval was also priced in, but over the first 60 days of ETF trading the bitcoin price rallied considerably,” Ballensweig said in an email sent to The Block.

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He further explained that there are certain events that can cause significant changes in the supply and demand dynamics of exchange order books and the halving will be one of such events.

“These particular events lead to real changes in supply and demand mechanics on exchange order books, as when the spot bitcoin ETFs were approved, there was committed capital ready to flow into those products, causing bid-side pressure and thus impacting price regardless of what trading activity looked like ahead of the event,” he said. 

“ When the event occurs, there will be less daily supply on the exchange order books and assuming constant demand, that will again lead to bid-side pressure as the sell-side is thinner,” he added.

Coinbase Analysts Disagree

Contrary to Ballensweig’s position, some Coinbase analysts have argued that indeed, the Bitcoin halving is already priced in. 

Analysts David Duong and David Han had earlier this month sent a note to The Block saying this halving is different since it is coming almost immediately after Bitcoin hits a new all-time high.

“This is the first halving cycle which saw bitcoin breach its all-time high before the halving, which could mean that the effect has already been priced in by savvy traders,” the Coinbase analysts said.

About the Halving

Bitcoin halving is an event that occurs roughly after every four years. This event marks a time when the reward for mining a Bitcoin block is reduced by half, thus reducing the number of new BTC coming to circulation.

Historically, the halving is followed by a price rally for Bitcoin and then for altcoins. This is what the Coinbase analysts say is not to be expected this year, because Bitcoin already reached a new all-time high just before the event. 

It remains to be seen who is right between Ballensweig and the Coinbase analysts as the halving in coming in less than seven days from now.

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Archie Lovell
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Archie Lovell

Archie Lovell, a premier voice in crypto journalism, skillfully demystifies the intricate world of digital currencies. With a keen analytical eye and compelling narratives, Archie's writings delve deep, offering clarity amidst the complexities of blockchain. His expertise and style make him a trusted guide in the crypto space.

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