tl;dr
The impending Bitcoin halving event, reducing mining rewards from 6.25 to 3.125 BTC, has prompted analysts like Arthur Hayes, Benjamin Cowen, and Peter Brandt to forecast a potential downturn in Bitcoin's price. Hayes predicts a market slump due to the entrenched positive narrative around the halvin...
The impending Bitcoin halving event, reducing mining rewards from 6.25 to 3.125 BTC, has prompted analysts like Arthur Hayes, Benjamin Cowen, and Peter Brandt to forecast a potential downturn in Bitcoin's price. Hayes predicts a market slump due to the entrenched positive narrative around the halving and broader economic factors, expecting a precarious period for risky assets. Cowen draws parallels with previous market corrections, while negative ETF flow data and potential pressure on Bitcoin miners may contribute to market hesitancy or profit-taking behavior.
WILL BITCOIN CRASH AFTER HALVING: ANALYSTS WEIGH IN
Arthur Hayes, a seasoned voice in the crypto sphere, presents a complex view of the Bitcoin halving. Despite the general optimism, he predicts a market downturn.
“The narrative of the halving being positive for crypto prices is well entrenched. When most market participants agree on a certain outcome, the opposite usually occurs. That is why I believe Bitcoin and crypto prices in general will slump around the halving,” Hayes explained.
Moreover, Hayes highlights the broader economic backdrop. He notes the tighter dollar liquidity and the onset of Quantitative Tightening (QT) by the Federal Reserve, which will reduce the money supply. Consequently, he expects a “precarious period for risky assets” in late April. Yet, he predicts a market boost post-May 1, following a Federal Reserve meeting, due to an anticipated liquidity injection.
“From now until May 1, I will be in a no-trade zone. I hope to return in May with dry powder ready to deploy to position myself for the bull market to begin in earnest,” Hayes remarked.
Benjamin Cowen, another crypto analyst, concurs with the cautious outlook. He draws parallels between the upcoming halving and the 20% market correction following the spot-Bitcoin ETF approvals in January.
“Usually these patterns do not repeat exactly, but just showing it here in case something similar happens once again,” Cowen said.
Veteran analyst Peter Brandt supports Cowen’s view, acknowledging recurrent patterns in Bitcoin’s bull markets.
This sentiment aligns with Monday’s ETF flow data, which showed a negative trend despite Bitcoin’s price reaching $72,000. For instance, the GBTC saw outflows of $303.3 million, contributing to a total negative ETF flow of $223.8 million. Whereas BlackRock’s IBIT reported just $21.3 million in inflows. This data might hint at a broader market hesitancy or profit-taking behavior.
Additionally, the halving will likely exert pressure on Bitcoin miners. With the reward halving, miners’ earnings, or hashprice, will likely plummet. Hence, they might resort to selling some of their Bitcoin reserves to meet operational expenses.
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