Will Bitcoin’s Price Climb Higher After the Halving? Here’s what four experts say – DL News

In what is being billed as the Year of the Dragon, Bitcoin is blazing its own fiery trail, helped in part by the long-awaited “halving” event planned for April.

The crypto community is buzzing with one burning question: Has the market already adjusted its lenses to take into account the impact of the halving?

Bitcoin’s so-called halving occurs once every four years and marks a change in the rewards, or payments, that miners receive for creating new blocks on the network. This effectively halves the new supply of Bitcoin entering the market each day.

The next halving is likely to be in mid-April and will see miners’ rewards drop – to 3.125 Bitcoin from 6.25 Bitcoin.

Less Bitcoin in circulation means, in theory, that the value of the asset will rise with demand amid more scarcity in supply.

However, research institutions, experienced experts and analysts seem to be divided.

Some say the run to new all-time highs has already begun, while others see the halving as a major catalyst for growth this year and beyond.

Bernstein analysts

Traditionally, Bitcoin’s value has risen after its halving events.

Still, this time, pre-halving price dynamics are being influenced by a unique mix of increased demand from exchange-traded funds and the expected supply squeeze due to the halving, research firm Bernstein said in a note to clients.

“We expect Bitcoin to reach a cycle high of $150,000 by mid-2025 and touch all-time highs in 2024,” Bernstein analysts wrote.

Bitcoin hit a record high of nearly $69,000 in November 2021.

The launch of spot Bitcoin exchange-traded funds in the US this year has been the most successful in ETF history, DL News reported Tuesday.

Skybridge Capital founder Anthony Scaramucci

Skybridge Capital founder Anthony Scaramucci said early this year that a post-halving trigger would push Bitcoin’s price into the six-figure range of $170,000 or higher in the next year and a half.

He first made the prediction to Reuters in January ahead of the World Economic Forum’s annual meeting in Davos.

“Wherever the price is on the day of the halving in April, multiply it by four, and it will reach that price in the next 18 months,” Scaramucci told the news outlet.

In an interview with Scott Melker on “The Wolf of All Streets” podcast weeks later, Scaramucci further explained: “I use a $35,000 number at the halving,” he said. “That’s conservative.”

Bitcoin crossed the $50,000 mark this week.

If that price holds during the halving in April, Scaramucci’s calculation would put Bitcoin at $200,000 by July 2025.

“My long-term price objective is for Bitcoin to easily reach half the market cap of gold,” he told Melker.

Depending on varying estimates of the total value of gold mined, Scaramucci’s Bitcoin target would mean that the total value of the cryptocurrency in circulation could reach around $6.5 trillion. This is a great prediction.

Today, Bitcoin hovers at around $1 trillion in total circulation.

Greyscale’s Michael Zhao

“It’s important to understand that a post-halving Bitcoin price increase is not guaranteed,” Michael Zhao, research analyst for Bitcoin ETF provider Grayscale, warned last week.

The anticipation of Bitcoin halvings suggests that savvy investors may buy early, potentially inflating prices ahead of the event.

This challenges some models that link scarcity to price increases but fail to account for the predictability of such scarcity.

Observations of other cryptocurrencies with halving events, such as Litecoin, show that post-halving price increases are not guaranteed.

This suggests that factors beyond scarcity, including macroeconomic events, significantly affect Bitcoin’s value, Zhao said.

For example, the European debt crisis in 2012, the initial coin offering in 2016, and the economic stimulus during the 2020 Covid-19 pandemic all coincided with Bitcoin price increases, highlighting its appeal as an alternative investment during economic uncertainty.

These periods suggest that while halvings play a role in Bitcoin’s scarcity narrative, broader economic conditions and investor sentiment also drive its price dynamics, Zhao said.

SynFutures Rachel Lin

Rachel Lin, co-founder and CEO of SynFutures, a decentralized derivatives trading platform, said that while the halving would support markets, “it is unlikely to drive a full-blown bull run.”

“This anti-inflationary measure makes mining new BTC more difficult, limiting supply,” she said in an editorial published in Fortune on January 26.

“In the absence of significant crypto adoption, this alone is not enough to take us back to BTC’s high of nearly $69,000, let alone surpass it,” Lin said.

A previous version of this article under the Scaramucci headline included the total value of Bitcoin, which is $1 billion. It was removed to instead refer to the total circulation of Bitcoin, which is around $1 trillion.

Sebastian Sinclair is a market correspondent for DL ​​News. Do you have a tip? Contact Seb at [email protected].