A recent panel at the Swan Pacific Bitcoin festival, titled “Are halving price cycles bullshit?” sparked a discussion on whether the Bitcoin halving is truly a bullish event or just a narrative that novice investors buy into. The panel consisted of Nik Bhatia, the host and founder of the Bitcoin Layer, Fred Thiel, Marathon Digital CEO, Ralph Zagury, Swan CIO, and Andy Edstrom, Swan product manager.
The conventional belief held by many in the Bitcoin and cryptocurrency space is that the Bitcoin supply halving is a bullish phenomenon that leads to a significant increase in BTC price. It is often seen as a highly anticipated event by Bitcoin enthusiasts.
However, during the panel, the speakers questioned this long-held belief and discussed the impact of the halving on Bitcoin price. Thiel and Zagury expressed their skepticism, suggesting that liquidity and market flow are the main drivers of the Bitcoin price, not the halving. Edstrom, on the other hand, believed that the halving still has a bullish effect on the price, although the magnitude of the impact can be debated.
The panelists agreed that while the halving might have some market-moving capacity, its significance may diminish over time. Bhatia pointed out that the halving affects supply but does not directly impact demand. However, from a psychological perspective, the halving could have an influence on market sentiment.
The discussion also touched on the role of derivatives in Bitcoin price discovery. Zagury highlighted that historical data and patterns of distribution show that Bitcoin’s price depends on time and past performance. He noted that Bitcoin often moves sideways or downward, making it challenging for investors to hold onto their investments.
Despite discounting the impact of halvings on BTC price, all panelists expressed positive long-term bullish perspectives for Bitcoin’s value. They agreed that liquidity would be the key catalyst for future price movements. Zagury believed that we are likely to see a big move in Bitcoin soon, as liquidity has been drawing down.
In terms of potential future liquidity, Edstrom hinted at factors like 10-year U.S. Treasuries pushing above 5%, regional bank failures, and increasing amounts of banks holding long-duration government debt at a loss. These signs indicate a possible Federal Reserve pivot back to quantitative easing, which could inject liquidity into the market.
In conclusion, the panel discussion raised important questions about the impact of the halving on Bitcoin’s price. While there are differing opinions on the significance of the halving, all panelists agreed on the importance of liquidity for future price movements. As always, investors should conduct their own research and exercise caution when making investment decisions.
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