Will the Bitcoin halving bring back another bubble market? | Monex Securities, Masamichi Matsushima

[Bitcoin Market]
Will the halving bring back a market bubble? 

I'm Masamichi Matsushima, a.k.a. Marin, a cryptocurrency analyst at Monex Securities. In this special edition, I will explain the Bitcoin "halving" scheduled for around April-May this year and its impact on the market.

In January 2024, a Bitcoin spot ETF was approved in the United States. In response to this, Bitcoin soared to new all-time highs in both Japanese yen and dollar terms, and expectations are high that the halving anomaly will continue this time as well.

The halving is an event in which the amount of new Bitcoin issued is halved approximately once every four years, and it has attracted a lot of attention as a cyclical event in the bubble market. Below, I will look back on the trends of the past three halvings and predict the market after this, the fourth halving.

Bitcoin price trends after each halving

The chart below summarizes Bitcoin's halving and price trends.

Looking at this, we can see that while the price rose significantly from the halving to the end of the following year in each of the past three halvings, the rate of increase has been shrinking with each halving. This is because as the market capitalization increases, the price growth margin also decreases.

Assuming that the same trend will continue this time, and assuming that the price at the time of the halving is $50,000 BTC, even if we estimate the rate of increase to a low 200% by the end of the following year in 2025, it is predicted to reach $100,000 BTC.

On the other hand, if we look at the rate of decline from the peak to the trough of Bitcoin at each halving, it has repeatedly crashed by around 80% in the past, triggered by major events that occurred the year after the peak.

Even if the price rises to a level exceeding $100,000 BTC in 2025 with the fourth halving, we must be aware that a major event that causes a crash could occur afterwards. Because physical ETFs and other instruments are making it easier for money from financial markets to flow into the cryptocurrency market, the next shock could be large-scale and affect the financial markets.