In a thought provoking document titled “Halving Handbook ” Coinbase Institutional has presented an analysis comparing the Bitcoin halving event scheduled for mid April 2024 with the previous market cycle spanning from 2018, to 2022.
The handbook explores the mechanics and historical significance of Bitcoin halvings which’re events known for their ability to reduce miner rewards by half thereby impacting the supply and market dynamics of Bitcoin.
The impending halving event will decrease the reward for miners from 6.25 BTC to 3.125 BTC following a tradition aimed at curbing inflation and controlling the introduction of coins into circulation. This event marking its occurrence has historically triggered changes in Bitcoins market value and investor behavior with Coinbase Institutional highlighting a substantial 500% surge from the lowest point of the previous halving cycle.
Coinbase Institutionals analysis goes beyond comparisons providing an insightful perspective on the potential consequences of the halving. The first halving in 2012 saw an increase of 923% in Bitcoins value over six months following it. However subsequent halvings have shown outcomes exerting a moderate yet positive influence, on the cryptocurrencys market price.The variations highlight the circumstances that characterize each halving occurrence.
In light of the data and speculative expectations Coinbase Institutional advises an approach when interpreting these patterns cautioning against projecting past results onto future outcomes due, to their speculative nature. The report stresses the importance of investors being wary of accepting perspectives noting the speculative basis of these forecasts.
Moreover the guide expands its focus to consider factors influencing the cryptocurrency market. It references elements such as monetary policy adjustments and fiscal stimulus measures as factors affecting Bitcoins pricing trends.
Specifically the report emphasizes speculation surrounding spot Bitcoin exchange traded funds (ETFs) and potential changes in Federal Reserve policies as crucial for understanding market movements indicating that halving is one of several factors impacting Bitcoins value.
Coinbases analysis also includes insights from analytics providing information on long term holders behavior and changing supply dynamics before and, after halving events.
The report presents a view of how supply and demand interact considering the distribution of supply, among long term holders and the trends seen after ETF introductions. It offers an analysis of the factors that might influence Bitcoins direction post the mid April 2024 halving.