Bitcoin Block Reward Halving and Market Expectations

Bitcoin’s fourth block reward halving, reducing the reward amount that miners will receive from 6.25 to 3.125 BTC, will decrease the newly entering BTC supply to 50%. This event has historically led to long-term increases in Bitcoin’s price and is expected to occur on April 19-20. However, financial institutions such as Goldman Sachs warn against an automatic expectation of value appreciation, similar to previous cycles. Emphasis on Changing Macroeconomic Conditions Goldman Sachs’ analysis acknowledges that Bitcoin has shown a tendency to gain value after previous halvings, but highlights the potential influence of different macroeconomic conditions in various cycles. Particularly in a period of high inflation and interest rates, it is suggested that market dynamics could be different from previous years. The upward trends observed in the cryptocurrency market following past halvings may not be repeated to the same extent due to these different macroeconomic factors. A high-interest and inflationary economic […]

Bitcoin Block Reward Halving and Market Expectations

Bitcoin’s fourth block reward halving, reducing the reward amount that miners will receive from 6.25 to 3.125 BTC, will decrease the newly entering BTC supply to 50%. This event has historically led to long-term increases in Bitcoin’s price and is expected to occur on April 19-20. However, financial institutions such as Goldman Sachs warn against an automatic expectation of value appreciation, similar to previous cycles.

Emphasis on Changing Macroeconomic Conditions

Goldman Sachs’ analysis acknowledges that Bitcoin has shown a tendency to gain value after previous halvings, but highlights the potential influence of different macroeconomic conditions in various cycles. Particularly in a period of high inflation and interest rates, it is suggested that market dynamics could be different from previous years.

The upward trends observed in the cryptocurrency market following past halvings may not be repeated to the same extent due to these different macroeconomic factors. A high-interest and inflationary economic environment can lead investors to avoid risk, which can put pressure on Bitcoin and other cryptocurrencies.

“Buy the Rumor, Sell the News” Expectation

Especially before this halving, the observed rise in Bitcoin’s value may turn into a “buy the rumor, sell the news” scenario after the event. This potential scenario suggests that prices could rise before halving and then decline after the event.

Points to Consider

Long-term rallies seen in BTC after past halvings may not have the same effect under current macroeconomic conditions.
High inflation and interest rates can reduce investor risk appetite and create stagnation in the cryptocurrency markets.
The effects of the block reward halving can be modeled by demand for spot Bitcoin ETFs and general market dynamics.

In conclusion, Bitcoin’s fourth block reward halving can significantly influence the cryptocurrency market, but investors need to consider current macroeconomic factors and market conditions. In this period, considering current economic indicators is as important as making predictions based on historical data.

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