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Bitcoin halving will be ‘price non-event’

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​The Bitcoin halving – likely on Friday or Saturday – will be a ‘price non-event’, depending on the exact current rate at which the cryptos are created, according to the CEO of a leading independent financial advisory and fintech.

Bitcoin halving is a programmed event that occurs about every four years, reducing the reward miners receive for validating transactions by half. This mechanism ensures scarcity and controls inflation in the Bitcoin network.

With each halving, the rate of new supply entering the market decreases, making Bitcoin increasingly scarce over time.

“Despite it being one of the biggest moments in crypto, the halving is likely not to move the needle too much in terms of values,” said Nigel Green of deVere Group. “Indeed, it’s likely to be a major price non-event.

He said that investors, traders and speculators priced-in the halving months ago.

“As a result, a significant portion of the positive economic impact was experienced previously, driving up prices to fresh all-time highs last month.”

Bitcoin reached a new all-time high price of $75,830 on March 14.

Green explained that the effects of the halving are not confined to the day it happens.

“Instead, they unfold gradually over time, influencing market dynamics – and, as history teaches us, driving the price upwards – in the months and years following the event.

“The reduction in the rate of new supply leads to a more pronounced scarcity, reinforcing Bitcoin’s status as a store of value asset.

Shaping sentiment

“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.”

Following the first halving in November 2012, Bitcoin’s price jumped around 9,500% to a peak of $1,160 over 367 days.

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.

The deVere CEO noted that there might even be “a temporary sell-off as investors employ a ‘sell the news’ strategy.”

Those who follow this strategy take advantage of this anticipation by buying the crypto asset before the news is released, hoping to capitalise on the price increase leading up to the event. However, once the news is officially announced or released, there can be a sell-off as investors who bought in earlier start to take profits. This can cause the price to decline.

Green concluded that, “the Bitcoin halving is a landmark moment, but the actual event will likely be a ‘flop’ for prices on the day.

“The huge significance lies in the positive impact it will have in the longer term on the price of the world’s biggest digital asset.”