Trading firm chief on Bitcoin halving impact: ‘Volumes are 10 times what they were four years ago’

The Bitcoin halving — pre-ordained by founder Satoshi Nakamoto some 15 years ago — will slash the rewards Bitcoin miners get for maintaining the blockchain, reducing by half the creation of new coins.

Theoretically, the dwindling supply will increase the value of Bitcoin.

Not this time, says Rich Rosenblum, co-founder and president at trading firm GSR.

“The fundamental impact of the halving is by far and away the smallest it has ever been,” he told DL News. “Not only is the change in supply half the change it was four years ago, but also volumes are 10 times what they were four years ago.”

The first halving in 2012 cut miner rewards to 25 Bitcoin for their labour. This, the fourth halving, will slash them to 3.125 Bitcoin.

Diminishing returns

A backdrop of macroeconomic factors have rocked markets this year, making it hard to pinpoint where Bitcoin is headed next.

They include the Federal Reserve stance on interest rates, growing tension in the Middle East, and the success of US spot Bitcoin exchange-traded funds.

The latter will have a bigger impact on the cryptocurrency’s price than the halving, Rosenblum said, even as spot Bitcoin ETFs have seen outflows over the past week.

Caroline Bowler, CEO of crypto exchange BTC Markets, echoed Rosenblum’s scepticism, saying that halving returns for Bitcoin have diminished over the years.

Historically, halvings have been huge windfalls for cryptocurrencies in general, not just Bitcoin.

Following the first halving in November 2012, Bitcoin’s price skyrocketed 9,583% to a peak of $1,160 over 367 days, Bowler told DL News.

The 2016 halving saw the price surge by 3,041% over 562 days to 19,660 over 562 days, and the 2020 halving saw the price jump by 802% to a top of $73,800 over 1,403 days.

A $450,000 price

Some analysts have presented a bullish outlook for the price.

Looking at data from the 2012 and 2016 halvings, Noelle Acheson, author of the “Crypto is Macro Now” newsletter, said that Bitcoin could surge to new all-time highs over the next year.

In the year following the 2012 halving, Bitcoin’s price surged 8,691% one year, and it then jumped 295% after the 2016 event, Acheson said.

If those patterns repeat, then Bitcoin could reach $450,000 a year from now, or $270,000 if this cycle turns out to be more like 2016, Acheson said in an April 13 newsletter.

The next halving is expected to occur on April 19.

Crypto market movers

• Bitcoin fell by 4.5% in the past 24 hours and is trading at $63,340.
• Ethereum dropped 4.4% to $3,090.

What we’re reading

• Five Bitcoin mining CEOs on how the halving will play out — DL News
• Crypto Investment Products Experience $126,000,000 Outflows — Milk Road
• How Much Money Could Pour into Hong Kong’s New Bitcoin, Ether ETFs? — Unchained
• Solana Developers Release Software Update To Alleviate Network Congestion — Milk Road
• Why DAOs are cashing out their tokens just as prices rise — DL News

Sebastian Sinclair is a markets correspondent for DL News. Have a tip? Contact Seb at sebastian@dlnews.com.