Investors shouldn’t get too excited about the Bitcoin halving event just yet.
While the halving event will increase the price of the token, it will happen gradually not immediately.
Bitcoin saw its new all-time high in March but tumbled back down in April.
The Bitcoin halving event is expected in April, and will probably be this Friday or Saturday. The event will see the number of new Bitcoins being mined halved, as in miners will only receive half of what they usually receive from the activity.
A halving is scheduled to occur once every 210 000 Bitcoin blocks are mined – something that happens roughly every four years. This will happen every four years until the maximum of 21 million Bitcoins are hit.
“Bitcoin halvings are important events for traders because they reduce the number of new bitcoins being generated by the network. This limits the supply of new coins, so prices could rise if demand remains strong,” explains IG.com.
Indeed, since Bitcoin began its record rally this year and leapt to its new all-time high in March of $75 830, investors and enthusiasts have been expecting the halving to pump the price of the token, which could even see new records hit by the world’s most important cryptocurrency.
However, according to financial advisory the deVere Group, and its CEO Nigel Green, who accurately predicted that Bitcoin would hit a new record price in March, the halving will feel a bit disappointing for investors.
The price of Bitcoin as of time of writing. Image sourced from CoinDesk.Green says the Bitcoin halving, despite previous expectations, will be a “price non-event.”
“The Bitcoin halving is a landmark moment but the actual event will likely be a ‘flop’ for prices on the day,” Green explains.
“Investors, traders, and speculators, priced-in the halving months ago,” he added in a statement sent to Hypertext.
“As a result, a significant portion of the positive economic impact was experienced previously, driving up prices to fresh all-time highs last month.”
Green believes that rather than a one-day price increase for Bitcoin due to the halving, the event will slowly unfold gradually over time and so will its influence on market dynamics. The price will increase for Bitcoin, but only after months or years after the halving occurs.
“This long-term narrative often plays a more significant role in shaping investor sentiment and price trends than the immediate impact of the halving itself,” he said.
“The 2016 halving saw the price jump by 3,040% over 562 days to 19,660, and the 2020 halving saw it surge by 802% to a top of $73,800 over 1,403 days.”
According to Green, the event will be significant because of the overall positive impact it will have on the price of Bitcoin, not because of a single-day pump. Investors may rush to buy Bitcoin ahead of the halving to get ahead of the news, but after the event, a likely sell-off will take place.
The token is sitting at $64 657 at press time.
[Image – Thought Catalog on Unsplash]
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