As the bitcoin halving approaches, new studies are pessimistic about its influence on the price of the cryptocurrency. Some believe that halving will not create an increase, others think that it will cause them to fall.
He gets closer and closer, but uncertainty still hovers around him. The bitcoin halving, the event that shakes up the world of cryptocurrencies every four years, must take place on the night of April 19 to 20, 2024, and it is awaited by many people. But, for once, the predictions concerning him are not really optimistic.
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Until then, halving has always led to an increase in the price of bitcoin and, in turn, that of the entire crypto-currency sector. The operation, which consists of halving the rewards received by bitcoin miners, creates a shortage in supply which must mechanically increase prices. But more and more experts believe that this halving could be different: it could stagnate prices, or even cause them to fall.
Can halving lower prices?
Until then, the consensus was that halving would lead to higher prices. However, a Coinbase study published in March and broadcast by CoinDesk estimated that the price of bitcoin would not necessarily be driven by this halving. Indeed, the recent record established by bitcoin would have been mainly due to the enthusiasm generated by the arrival of bitcoin ETFs on the market – and this increase would have petered out the halving in advance.
Coinbase was the first to defend this rather pessimistic opinion, but it is no longer the only one: Deutsche Bank also predicts that there will be no post-halving increase, in a report shared by CoinDesk. The bank even goes so far as to say that the “rally”, the rise in prices of the entire crypto-currency sector which usually followed the halving, had very little chance of happening.
However, the report does not dampen all the hopes of investors. “ We continue to expect prices to remain elevated due to expectations regarding future ETF approvals, future central bank rate cuts and regulatory changes », Indicates Deutsche Bank in its report.
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But not everyone is so optimistic: JPMorgan bank expects now for bitcoin to unravel. According to its analysts, the value of bitcoin, which is currently around $60,000, is overvalued and therefore prone to readjustments. According to JPMorgan, bitcoin could thus fall back to around $42,000 after the halving – a drop of 30% in its price.
The example of Bitcoin Cash
Another indicator that all is not well for bitcoin: the evolution of the price of Bitcoin Cash. Bitcoin Cash, a variant of cryptocurrency from a fork in 2017, recently had a halving, which took place at the beginning of April. This first caused the price of Cash to rise, with investors having purchased cryptocurrency in advance in anticipation. Once the halving passed, the price also continued to increase: an increase of 10% was recorded immediately afterwards.
But the celebrations were only short-lived: once the halving occurred, many miners turned away from the blockchain to go to other networks, which brought in more money. This initial wave led to a drop in hashrate (computing power), which in turn caused turbulence on the blockchain. Some blocks took at least 30 minutes to be mined — and this wait dragged down the price of Bitcoin Cash. Its price dropped from $700 to $450, a drop of 35%. Many observers believe that the two cryptocurrencies, bitcoin and Bitcoin Cash, will follow the same evolution, making JPMorgan's prediction all the more likely.