Andy Bromberg, CEO of Beam, told Decrypt that much of bitcoin's recent volatility is a sign that traders are second-guessing the upcoming halving — and that's completely normal.
“What happens is that in the months before it happens, people tend to pull things in with the narrative of price increases,” he said. “And then everyone has this crisis of faith before it goes down and you're thrown into this whipsaw dynamic.”
That's where Bromberg thinks the market is right now. Over the past week, Bitcoin rose above $73,000 to set a new all-time high and then sank below $62,000.
As of this writing, Bitcoin's price is just shy of $65,000 after losing 3% the previous day, according to data from CoinGecko.
Bitcoin halving As the name suggests, new bitcoins are halved to miners. Bitcoin has happened three times since its launch in January 2009.
As of this writing, it looks like the next half-episode will land on April 27, according to Nisehash. But the halving is scheduled after certain blocks are mined on the Bitcoin network, which is difficult to identify.
It's the same reason the arrival time on a GPS changes during a trip. It is always being recalculated assuming that you (or your bike or car) will continue moving at your current speed for the rest of the trip. But of course this is not always true or possible.
Earlier last week, with Bitcoin poised to set a new all-time high and understandably high Bitcoin volume, the NiseHash countdown showed that it would be halving as early as April 15th.
Bitcoin half and price
A price rally usually begins when the amount of new bitcoin entering the market halves every four years.
In the year On November 28, 2012, until the first half of the year, the price of Bitcoin showed a significant increase. Since Bitcoin first launched in January 2009, it has gone from trading for less than a penny to over $12.
Then, the price continued to rise in the months after the cut, finally surpassing $100 in April 2013 for the first time.
The price of BTC was relatively stable in the months leading up to the second half on July 9, 2016. But after the halving, Bitcoin's price experienced a slow but steady rise, eventually reaching an all-time high of $19,783.06 in December 2017.
Before the third quarter, on May 11, 2020, the price experienced volatility and a significant decline. The Covid-19 pandemic led to social distancing orders and the uncertainty of March 2020 was taking its toll on the economy. After the halving, the price began to recover and in It made a major rally in late 2020 into 2021 when it rose to $69,000 and set a new all-time high.
But Bromberg said there are a few reasons why this halving isn't the same as others.
“The need is there [for Bitcoin] It's going to change,” he said. “Especially with ETFs. Now, there is this new demand driver. We've been looking at these revenue streams over the past few days, and it's important.
In the past week alone, US spot Bitcoin ETFs have bought about 36,000 BTC, according to CoinGlass. Things have been overbought this week with four consecutive days of net inflows due to Monday's flash.
There was speculation that the halving and constant demand for ETFs could create a liquidity crisis, but Bromberg was unconvinced. Especially since most ETF investors don't tend to be long-term, dogmatic holders. In his experience, they buy and sell stocks to suit their portfolio.
“I think the broader Bitcoin markets, especially right now, and especially ETFs, and the future – these markets are deep and liquid,” he said. “There really is no such thing as liquidity.”
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