- 2036
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- 👎 Was the Bitcoin halving a flop?
GM everyone. This is 2036.
The Bitcoin halving took place almost a month ago.
It cut the new supply issuance of bitcoin in half (hence the name).
Less supply📉 = price goes up 📈 … right?
Well, since the halving, the price of Bitcoin has gone precisely nowhere.
So what’s the verdict? Did the Bitcoin halving matter, or was it a non-event?
Let’s have a look 👀
Bitcoin halving nihilists are those who believe the halving doesn’t matter.
Here’s how they explain their stance…
1/ It is nonsense to derive a statistical pattern from an event that has only occurred four times before in history.
It’s not science; it’s astrology for nerds 🔮
2/ Making claims about Bitcoin going up after the halving doesn’t make sense because Bitcoin goes up 9 years out of 10 📈
That’s like saying:
‘when there are forest fires in California, bitcoin goes up’….
… which it might, but it’s not because of the forest fires, but instead because, on average, Bitcoin goes up.
3/ Events that affect prices are generally unforeseeable 👁️
The bitcoin halvings have been programmed since the beginning of Bitcoin. Bitcoin is deflationary because of the halvings.
They’re not some unexpected event, and as such, they’re already priced in because they’re part of the reason investors buy bitcoin in the first place.
4/ The only reason the halving could affect prices is because of flows 🌀
If miners have fewer bitcoins to sell, the overall selling pressure on bitcoin will be reduced.
But miner selling is a tiny percentage of bitcoin’s daily trading volume.
They’re a drop in the ocean 💧 Bitcoin ETFs, trading, leveraged derivatives, etc. are all WAY more important.
*
Fair arguments, right?
But here’s the thing.
Markets are like beauty contests 💄
If a handful of people think something is true, many others tend to believe it.
Even people who disagree might think enough others believe it to make it come true.
This creates a self-fulfilling prophecy.
And the Bitcoin halving story is one of the most powerful price narratives in all of crypto.
Historically, the effect of the Bitcoin halving kicks in 3-9 months after the Bitcoin halving.
You can see it clearly here:
… and here:
So even if the Bitcoin halving story is:
statistically insignificant
supposedly priced in
a drop in the ocean of bitcoin flows
… it could still drive prices much higher in a few months if enough people believe it to be true.
Only time will tell.
Until then, we wait.
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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.