Key facts:
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It’s been more than 125 days since the Bitcoin (BTC) halving.
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According to the specialist, the approval of the ETFs brought forward the increase in demand.
It’s been more than 125 days since the Bitcoin (BTC) halving and so far there has been no bullish impact on its price following that event, as many expected would happen.
He halving is the BTC issuance reduction event that occurred in April 2024 and serves to ensure that the circulation of the asset is limited and scarce.
Thus, with a more limited supply and increasing demand, it is possible that the price of this asset will rise. Historically, BTC price entered a bullish rally 150 days after this event.
However, at the time of writing, the price of bitcoin is $57,900, more than 20% below the $73,750 it reached on March 14, 2024, its all-time high.
Bitcoin price so far in 2024. Source: TradingView.
After the halving, there were several events that generated downward pressure on the price of bitcoinThese events include US macroeconomic data, geopolitical tensions and the end of the Japanese Yen Carry Trade.
However, Jasper De Maere, head of research at Outlier Ventures, consider that there has not been a bullish rally because the four-year cycle “has died.”
For him, BTC is experiencing “the worst price performance after any halving to date.”
To support his argument, the specialist uses a table that shows the performance of the asset at different times after each halving, focusing on the behavior of the price 200 days before the event and the 365 days after.
In epoch 5, corresponding to 2024, the percentage relative to the halving is 0.92x, which indicates an 8% decrease in price. A marked contrast with previous times, where the increases were notable, as seen in the image:
Bitcoin performance at different times after each halving. Source: Outlier Ventures.
In this sense, he explains that the momentum that the digital currency took at the beginning of 2024 It was not because of the halving event but because of the approval of exchange-traded funds (ETF) in the United States based on bitcoinWhatever the reason, it cannot go unmentioned that such a push did exist and it was in a halving year, which puts cold water on De Maere’s thesis.
In this regard, De Maere says:
“We had the approval of the bitcoin ETF which, since January 11, 2024, has seen a net inflow of 299,000 BTC, which has significantly boosted the price. So let’s be honest. The surge was not in anticipation of the halving.”
Jasper De Maere, Head of Research at Outlier Ventures.
Since their launch, these financial instruments have accumulated net inflows of more than 17 billion dollars. Due to the operation of ETFs, Management companies must support and hold bitcoin in their treasuries to support the shares. That is why its good performance has a direct impact on its price.
In this regard, De Maere argues that “the halving no longer has a fundamental impact on the price of BTC and other digital assets, the last time it had one was in 2016” and remarks: “It is time for investors to move away from the notion of a four-year cycle as digital asset markets mature.”
In this way, the specialist questions historical trends, in which it is observed that the halving was a catalyst for the price of the digital currency:
BTC performance 100 days AFTER halving and ETF catalysts. Source: Outlier Ventures.
The analysis of the Outlier Ventures specialist is completely opposite to that of the analysis firm CoinMetrics, which details that “the Bitcoin halving in 2024 was the most important in its history, as (…) it tested the balance sheets of a multi-billion dollar industry” (referring to Bitcoin Mining).
Meanwhile, the market analysis company, Alfa Bitcoin, stands out that, in previous cycles, The bullish effect started around 150 days after the halving.
The truth is that, for De Maere, if the event “still mattered we should have seen significant price action thanks to this double catalyst (due to bitcoin ETFs).”
It is striking that the analyst says these things with such conviction, considering that BTC has indeed reached a new all-time high in 2024 and that the bullish cycle is probably not over. According to most specialists, Bitcoin could hit new all-time highs in the last 3 months of the year.
What happened in 2020?
Following the Bitcoin halving in 2020, the digital currency’s price experienced a significant increase, which was reflected in other cryptocurrencies.
However, De Maere believes that this increase in risk assets was due to “an unprecedented amount of money being printed in response to COVID-19.” He added:
“While not a fundamental factor, the halving could have influenced BTC’s price action from a psychological standpoint.”
Jasper De Maere, Head of Research at Outlier Ventures.
Regarding the latter, it is worth asking: with this same criterion, could not the halving continue to exert psychological influence on investors in 2024?
But, returning to De Maere’s opinion, in the following graph, we can see in the green bars that Money printing experienced a significant increase at the start of the COVID-19 pandemicpeaking at around 25% in 2021, before gradually declining during epoch 4. The yellow line, meanwhile, represents the price movement of BTC. The correlation is evident.
US money supply (M2) and BTC price around the 2020 halving. Source: Outlier Ventures.
2016: The last halving that impacted the price (according to De Maere)
In conclusion, in the firm’s report, De Maere explains that —in his personal opinion— The last halving that had an impact on the price of bitcoin was in 2016.
Back then, bitcoin issuances still accounted for a significant portion of the market, but as transaction volumes have grown, the impact of miners selling their block rewards has dropped to negligible levels. ““Until mid-2017, miners had an impact of more than 1% on the market. Today, if miners were to sell their entire BTC block reward, it would represent only 0.17% of the market volume,” he details.
Potential market impact if all miners sold the daily BTC block reward. Source: Outlier Ventures.
However, it does not take into account the assets that weak miners previously accumulated and were sold to upgrade to more efficient hardware, as their income is halved while maintaining the same costs, which was called “miner capitulation”. That event Yes he had impact in the priceas reported by CriptoNoticias at the time.
Concluding his report, the specialist states: “In 2020, it was not the halving but the response to COVID-19 and the subsequent money printing that triggered the bullish trend. It is time for investors trying to time the market to focus on the most significant macroeconomic drivers rather than relying on the four-year cycle.”
The truth is that for now (for whatever reason) the halving “clock” seems to be ticking even though De Maere says otherwise. And 2024 has been no exception, with bitcoin reaching new all-time highs.
It remains to be seen whether the analyst’s thesis is proven correct in the coming months or years. For now, it is only a thesis.
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