As a major landmark event in cyclical theory, the Bitcoin halving in history seems to always set off a storm in the market. However, some people try to use a magnifying glass to dig into the details and find various loopholes in the cyclical theory in an attempt to break "Bitcoin". Coin halving cycle theory”. So, is the "halving cycle theory" just trying to find a way out of trouble?
The famous "Ding Crab Effect" has always existed in the encryption market. This is a certain manifestation of the herd effect. Most people may choose to follow the crowd because they are afraid of going against the mainstream view.
To put it bluntly, even if periodic theory is just a kind of superstitious metaphysics, if more people believe in it, it will easily become a consensus and form a trend. Just as people have analyzed the major positive spot ETFs that have been passed for more than half a year, they did not rise but fell instead. The market is often not influenced by rationality. People are more willing to believe in laws such as the exhaustion of the good news and the bad news.
So after the Bitcoin halving, will it be a good thing or a bad thing? Judging from the market after previous rounds of halving, the crypto bull market is not entirely attributed to the halving itself. It mainly comes from different logics such as the explosion of the concept of digital gold, the explosion of blockchain smart contracts, and the implementation of DeFi applications, which supported the previous rounds of bull markets. . Therefore, whether the fourth Bitcoin halving can bring big market trends as usual requires at least a comprehensive consideration of these variables.
Reduced miner rewards and rising production costs
While the crypto market was still collectively boiling, traditional financial giant JPMorgan Chase poured cold water on it at an inappropriate time: analysts predicted that the price of Bitcoin would fall to $42,000 after the halving. Simply put, JPMorgan analysts believe rising production costs are having a negative impact on prices.
Bitcoin halving cycle and market trends
So far, Bitcoin has undergone three halvings, which the industry calls the halving cycle.
The first halving cycle: 2012.11.28-2016.07.10. This halving cycle resulted in two bull markets in April and November 2013. In the first bull market, the price of Bitcoin rose from US$12 to US$288. The price increase was is 2300%; in the second bull market, the price of Bitcoin rose from $66 to $1242, a price increase of 1782%.
The second halving cycle: 2016.07.10-2020.05.12, this halving cycle caused a bull market in December 2017. In the 2017 bull market, the price of Bitcoin rose from US$648 to US$19,800, a price increase of 4158%.
The third halving cycle: 2020.05.12-? This halving cycle will produce two bull markets in April and November 2021. In the first bull market, the Bitcoin price rose from US$8,181 to US$64,895, a price increase of 693%; in the second bull market, the Bitcoin price rose from US$29,296. To $69,000, the price increased by 135%.
Bitcoin price performance data for previous halvings
The Bitcoin halving event is closely related to the bull cycle of the entire crypto market. Historically, every time a halving occurs, Bitcoin prices rise rapidly and reach all-time highs within 6 to 18 months. Therefore, the impact of Bitcoin halving on the market has received great attention in the industry.
Summarize
The Bitcoin halving may never have been the direct cause of the bull market, but that everything is ready and all it takes is the "east wind" from the east wind. The market has never been a place to judge right from wrong or to be rational. It is obviously not important whether the cyclical theory is a desperate matter, because there is a strong demand and logic behind it.
Although the variables in 2024 will be mixed, there are many narrative combinations that capital can play, including the superposition of multiple logics such as halving + ETF inflow + Bitcoin ecology + U.S. dollar interest rate cuts. Bitcoin may "convince people with its rise."
In the crypto industry, if you want to seize the next bull market opportunity, you must have a high-quality circle, so that everyone can stay together and maintain insight. If you are just one person, looking around at a loss and finding that there is no one around, it is actually very difficult to persist in this industry.
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