[NEWS] Coinbase analyzes Bitcoin halving price, sounds warning based on current market conditions

On the 20th, US cryptocurrency exchange Coinbase released a report on the Bitcoin (BTC) halving for institutional investors, "Halving handbook: A primer for institutional investors." It compares the halving with the market cycle from 2018 to 2022 and analyzes the potential impact on the cryptocurrency market.

Bitcoin's halving, scheduled for mid-April, will halve miner rewards from 6.25 BTC to 3.125 BTC. This will be Bitcoin's fourth halving, which is said to suppress inflation and increase scarcity by reducing the supply of new coins in circulation.

Coinbase compared the halving cycles from 2012 to 2022 in the report.

In the first halving, which occurred in November 2012, mining rewards were halved from 50 BTC to 25 BTC. The impact of the first halving was initially uncertain, and Bitcoin's closing price on that day was $12.35. However, 150 days later, the price of Bitcoin rose to $127, an increase of 923%.

In addition, in the second halving in July 2016, expectations were high, especially among the community, due to the experience of the price rise in 2012. In fact, the price of Bitcoin, which was traded at $650 during the halving in 2016, rose to $758 150 days later.

When the third halving occurred in May 2020, which is still fresh in people's memory, the price of Bitcoin rose from $8,820 on the day of the halving to about $10,940 150 days later.

Looking back at the past, Coinbase points out that Bitcoin has risen on average by 61% in the six months leading up to the halving and 348% in the 150 days following the halving.

A warning about post-halving trends

Although it is expected that the price will rise after the halving, Coinbase warns that caution is needed given the current speculative market environment.

The report explained that "investors should be cautious about accepting this view wholeheartedly. While the halving may affect Bitcoin's performance, historical evidence is still limited and remains speculative."

The report also states that broader macroeconomic factors that influence Bitcoin's price, such as monetary easing by the Federal Reserve, should also be looked at. In particular, it highlights that expectations for a Bitcoin spot ETF and the possibility of an interest rate cut by the Fed are factors behind the recent price increase, and points out that the halving is just one of the factors that could shake up Bitcoin's market dynamics.

Reference:Report
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