Is Bitcoin Halving in BTC Price? Expert debate

A recent panel at the Swan Pacific Bitcoin Festival asked, “Is Halving Price Cycles Bullshit?” It is titled. During the discussion, Nick Bhatia, host and founder of Bitcoin Layer, asked Marathon Digital CEO Fred Thiel, Swan CIO Ralph Zaguri, and Swan Product Manager Andy Edstrom to share their thoughts on whether the Bitcoin halving is really a serious phenomenon or just another startup narrative. Investors buy.

While the headline of the panel may be off-putting to some, the question is of great interest to all Bitcoin (BTC) and cryptocurrency investors. A common belief among many in the space is that the Bitcoin supply halving is a drastic event, and when it is done, the price of BTC will follow a near parabolic curve.

Go and ask any Bitcoin lover about what they're most excited about next year, and if they don't mention the possibility of a Bitcoin ETF being approved first, they're probably going to mention the upcoming stripping event.

Previous Bitcoin halving events have fueled bull markets.

But are the macro conditions ripe for that in May next year?

~ If we get past the initial shock of the recession.~ If a BTC ETF is approved somewhere.~ If QE is back on the menu.

Then the planets will be… pic.twitter.com/g5dEEKiSMF

— ecoinometrics (@ecoinometrics) September 6, 2023

While past performance provides some compelling evidence of what could happen in the next half, questioning long-term opinions and price assumptions for a highly volatile asset like Bitcoin is probably something every investor should do more often – especially given the number of bearish events. It happened in the last two years.

To kick off the discussion, host Nik Bhatia asked, “If the halving is the main driver of Bitcoin's price?” He jumped in asking.

TL quickly responded:

“In this cycle, no, I think it's liquidity.”

Zaguri agrees, saying, “It's really the flow that drives the market, so there's nothing that affects the value of half of the translation.” Interestingly, Edstrom took a different stance, suggesting that:

I think half of it is still rough and we're debating what the magnitude of that effect is, but yes, I think it's still important for value.

Every panelist, including host Bhatia, seemed to agree that while a halving would have some market-moving potential, it would likely diminish over time. According to Bhatia,

“A halving affects supply. As time goes on, there is less and less material and it has no effect on demand. But psychologically, we may be able to play devil's advocate.”

Half the hype and hopium is all over the heads of investors.

Hypothesis is basically the basis of all investments, and although Zaguri and Thiel investors are more optimistic minds, from the predicted impact on the Bitcoin halving, Edstrom describes the event as “a manifestation of a psychological feedback loop to come to the side of the question.”

“We think the future of Bitcoin is bullish and we also apply an investment lens when we are investing in Bitcoin.”

Another belief held by many investors over the years is the role that derivatives play in Bitcoin's price discovery. Bhatia said derivatives played more of a role in spot trading than in influencing Bitcoin's price action, Zaguri said.

“The reality is that the data points we have are not enough to draw any conclusions in terms of halving. If you look at the historical price of Bitcoin, we've got the whole set of prices, and try to find the distribution patterns, how the returns actually work, you'll see very quickly that there is a lot of external correlation, which means That value is based on time and past performance.”

According to Zaguri, “The most curious thing about bitcoin, and I think there's no such asset class, is that often bitcoin is going sideways in terms of the number of days. It is to the side or down.

Related: BTC Price Models Hint at $130K Target After 2024 Bitcoin Halving

The time spent trading bitcoin in a regional band or downtrend, Zaguri says, “makes it harder to hoddle, right, because it means you're going to have months and years of pain and you're going to have glory days.” He said.

“Hodler, by definition, with the price spread you've seen historically, it's very difficult.”

Returning to the original question about the role derivatives play in Bitcoin price discovery, Zaguri says:

“When you talk about derivatives, you're talking about probability first. It is impossible to conclude what is going to happen with the price of Bitcoin, the first thing to conclude is by looking at historical reactions. Going back to the half, the external reality is related to many, sometimes, especially low liquid periods. A small move that pushes the price up, the margin seller there goes through the short sellers and then the price goes up significantly. This explains why prices increase so quickly.

Fluid becomes the focal point.

Although Bitcoin supply has halved its impact on BTC price, each panelist expressed a positive long-term bullish outlook for Bitcoin's value.

As a price-stimulating equity deal for Bitcoin futures, Zaguri said:

“I'm so stupid. I think we'll see that soon, because liquidity is going down and we'll see these things start to happen and it won't take long to see a very big move.

Asked when and how this much-needed liquidity will return, Edstrom pointed to a 10-year U.S. Treasury yield pushing above 5%, regional bank failures mirroring those seen six months ago, and an increase in the number of long-term government holdings by banks. Debt in bankruptcy, signs that the Federal Reserve's pivot back to quantitative easing could happen soon.

This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.