Asset Manager Bitwise Says Market Underestimates Long-Term Impact of Halving
Bitwise Asset Management has issued a word of caution ahead of Bitcoin’s highly anticipated halving, which is set to occur on April 20.
Despite the excitement surrounding this event, historical data suggests that the immediate aftermath may not be as bullish as many anticipate, Bitwise said in a recent post on X .
According to the asset manager, while the month immediately following the halving typically sees a modest drop in price, the subsequent year often witnesses exponential gains.
For instance, following the 2012 halving, Bitcoin experienced a meager 9% increase in the month post-halving, only to skyrocket by a staggering 8,839% over the following year.
Similar patterns were observed after the 2016 and 2020 halvings, with Bitcoin’s price surging significantly in the year following each event.
Bitwise’s analysis suggests that the market tends to underestimate the long-term impact of halvings, focusing instead on short-term fluctuations.
This sentiment is echoed by industry experts, who foresee potential challenges in the immediate aftermath of the halving.
Markus Thielen, head of research at 10x Research, anticipates a $5-billion miner sell-off post-halving , which could exert downward pressure on the markets.
Fred Thiel, CEO of Marathon, believes that the anticipated rally following the halving has already been factored into current prices .
Furthermore, recent market indicators have raised concerns about a potential correction.
Trader and analyst Rekt Capital highlighted several significant pullbacks since the 2022 bear market bottom, with corrections ranging from 18% to 23%.
Currently, the market has corrected by 16%, indicating the possibility of further declines.
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