Bitcoin Block Reward Halving and Market Expectations

Bitcoin’s fourth block reward halving, reducing the reward amount miners will receive from 6.25 to 3.125 BTC, will decrease the newly entering BTC supply by 50 percent to the market. This event has historically led to long-term increases in Bitcoin’s price and is expected to take place between 19-20 April. However, financial institutions such as Goldman Sachs warn against the expectation of automatic value increase.

Emphasis on Changing Macroeconomic Conditions

Goldman Sachs’ analysis, while acknowledging Bitcoin’s tendency to increase in value after previous halvings, notes that different macroeconomic conditions in different periods could affect this trend. Especially in an economic environment with high inflation and interest rates, the dynamics of the market could be different from previous years.

The observed upward trends in the cryptocurrency market after past halving events may not be repeated to the same extent due to macroeconomic factors this time. A high-interest rate and inflation economic environment could lead investors to avoid risks and create pressure on Bitcoin and other cryptocurrencies.

“Buy the Rumor, Sell the News” Expectation

Especially prior to this halving, the observed value increase in Bitcoin could turn into a “buy the rumor, sell the news” scenario after the event. This scenario suggests the potential for prices to rise before the halving and fall after the event.

Points to Consider

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

In conclusion, Bitcoin’s fourth block reward halving could significantly affect the cryptocurrency market but investors need to take into account current macroeconomic factors and market conditions. In this period, considering not only predictions based on past data but also current economic indicators is crucial.