Following the highly anticipated Bitcoin halved, investors and analysts are now divided on its potential impact on the cryptocurrency market. With historical data serving as a guide, experts are offering contrasting views on whether the event will trigger a Bitcoin price surge or lead to a selloff.
Bullish Outlook: Historical Trends and Institutional Interest Fuel Optimism
Matt Hougan, chief investment officer at Bitwise, stands firmly in the bull camp, citing historical patterns as evidence of rising prices after a halving. According to him, past halving events were followed by a substantial increase in the Bitcoin Prices long-term.
Hougan points to the reduction in new supply entering the market following the halving, coupled with growing demand from institutional investors via spot Bitcoin ETFs, as key factors in potential price appreciation.
Skeptical beware: is the halving already taken into account?
However, not everyone shares Hougan’s optimism. Dan Dolev, managing director of Mizuho Securities, takes a more skeptical stance, suggesting that the halving event may already be fully priced into the market.
He warns of a potential “sell the news” scenario, in which investors who had anticipated the event could rush to sell once it occurs. Dolev points to the increased publicity surrounding this year’s halving compared to previous cycles, indicating that market expectations may have already been factored into current prices.
Institutional interest and market maturation
Jeff Hancock, CEO of Coinpass, offers a nuanced perspective, highlighting the growing institutional interest in Bitcoin as a real asset. He believes that Bitcoin has evolved from a speculative asset to a legitimate investment opportunity, especially in light of inflation and high interest rates in traditional markets.
Bitcoin is now trading at $63.663. Chart: TradingView
Hancock points to the success of spot Bitcoin ETFs, which have accumulated more than $60 billion in assets over a relatively short period, as evidence of institutional demand for exposure to cryptocurrencies.
Symbolic Meaning of the Fourth Halving
Thomas Perfumo, head of strategy at Kraken, highlights the symbolic nature of the halving. He notes that this event marks a significant milestone in Bitcoin history, with over 90% of the total supply already mined.
Perfumo highlights the implication of sub-1% inflation in circulating supply going forward, highlighting Bitcoin’s scarcity and value proposition as a digital asset.
As the Bitcoin halving draws to a close, conflicting perspectives abound regarding its impact on the cryptocurrency market. While some experts remain optimistic, anticipating rising prices driven by tight supply and institutional demand, others are calling for caution, warning of potential market dynamics already priced into current valuations.
Featured image from Pexels, chart from TradingView
