Analysis of Bitcoin Halving Cycle Theory and Performance in 2024
Publication Time:2024-09-04 13:26:11
Jasper De Maere, a researcher at Outlier Ventures, highlights the Bitcoin halving cycle theory is facing challenges. In 2024, the fifth period following the Bitcoin halving, there was a significant deviation from expected price performance within the subsequent 125 days. This performance was notably lower than the average increase of 22% observed in previous cycles. The post-halving event in 2024 saw a 8% drop in BTC price, marking the weakest performance since the post-halving in 2016. This phenomenon suggests that the impact of Bitcoin halving on market trends may have diminished, particularly after 2016. With the maturation and diversification of the cryptocurrency market, the relative reduction in miner block rewards has emerged as a new factor influencing Bitcoin price movements. Moreover, the article emphasizes the market performance post the halving in 2020. Although some argue that the 2024 halving cycle still holds, this perspective overlooks the unprecedented surge in global capital inflows, especially the substantial increase in the US money supply (M2) following the 2020 halving. This partly explains the strong market performance at that time. The approval of BTC ETFs, while viewed by some as a demand-driven catalyst, does not contradict the supply-driven event of halving. Instead, both factors simultaneously influence the market, affecting Bitcoin's price volatility. In summary, the influence of the Bitcoin halving cycle appears to be gradually diminishing, and market participants need to consider a broader range of factors such as macroeconomic environment, policy changes, and technological advancements for accurate predictions of market dynamics.
Bitcoin
Cryptocurrency
Market Price
Halving Cycle
Economic Logic