Bitrabo Editorial
The concept of a four-year cycle influencing Bitcoin and other digital asset prices might not hold true anymore, says a recent report by Outlier Ventures published on September 3, 2024.
Shifting Away from the Traditional Cycle
The report authored by Jasper De Maere suggests that it’s time for founders and investors to rethink the traditional idea of four-year cycles in the cryptocurrency market, especially concerning Bitcoin.
After the April 2024 halving and Bitcoin’s move to epoch 5, the primary cryptocurrency is experiencing a period of poor price performance.
Bitcoin mining rewards undergo a halving every 210,000 blocks confirmed on the network. Following the recent halving in April, miners’ block rewards decreased from 6.25 BTC to 3.125 BTC. Each halving marks an epoch, and the current one will persist until the 2028 halving, leading Bitcoin into epoch 6.
More than 125 days have passed since the April halving event, and Bitcoin’s price has dropped by 8%, contrasting with a typical 22% increase seen in previous epochs during the same timeframe. Over successive epochs, Bitcoin’s long-term price movements have shown a decreasing trend.
Analysts note that the last significant impact of a halving event on Bitcoin’s price was witnessed during the transition to epoch 3 in 2016. This impact is illustrated in a chart provided in the report.
The chart illustrates a hypothetical scenario where all BTC miners instantly sell their block rewards in the market. The data indicates the potential selling pressure on BTC’s price in such a situation. Unlike in the past, in 2024, if all miners sold their block rewards, it would only make up 0.17% of the market volume.
This chart highlights the diminishing effect of miners selling their block rewards on Bitcoin’s price, indicating the growing maturity of the digital assets market.
Regarding Bitcoin’s positive price movement following the 2020 halving, the report attributes it more to central banks’ extensive money printing in response to the COVID-19 pandemic rather than the halving event itself.
Optimistic Analysts on Halving Effects
While Outlier Ventures’ report suggests that the latest halving might not significantly affect Bitcoin’s price, other analysts have different viewpoints. Seasoned trader Peter Brandt predicts that Bitcoin could reach a peak around August 2025.
Similarly, Bitwise, a major spot Bitcoin ETF provider in the US, has made bold forecasts about Bitcoin’s performance leading up to the 2028 halving, predicting the possibility of Bitcoin’s price surpassing $250,000.