Source: Zhitong Finance
J.P. Morgan analysts believe that after the halving, the price of Bitcoin may fall because the market is still overbought. Deutsche Bank analysts also don't think that the price of Bitcoin will rise sharply after the halving, because this incident has already been digested by the market.
Cryptocurrency investors are eagerly awaiting the upcoming Bitcoin halving. This incident occurs approximately every four years, and the halving is expected to occur in the early hours of Saturday morning GMT. Chris Gannatti, head of global research at WisdomTree, an asset management company that sells Bitcoin exchange-traded funds (ETFs), put it bluntly that the Bitcoin halving was “one of the biggest events in the crypto sector this year.”
According to reports, the halving is about to cut mining rewards in half, with the aim of controlling the supply of Bitcoin and providing stability. For some cryptocurrency enthusiasts, the halving would underscore the value of Bitcoin as an increasingly scarce commodity. Skeptics, on the other hand, believe that this is nothing more than a technological change advocated by speculators to raise the price of cryptocurrencies.
In 2023, Bitcoin slowly recovered from its sharp decline in 2022. At the beginning of this year, the US Securities and Exchange Commission (SEC) approved a spot Bitcoin ETF, and the market's optimistic expectations about the Fed's interest rate cut provided support for the price of Bitcoin and other cryptocurrencies. Bitcoin once soared to an all-time high of $73,803.25 in March of this year.
However, since Bitcoin hit a record high in March, Bitcoin's performance has not been good and has declined over the past two weeks due to heightened geopolitical tension and the expectation that major central banks will maintain high interest rates for a longer period of time, making the global market uneasy. On Friday, after reports claimed that Israel was suspected of launching a retaliatory attack on Iran, risk assets suffered a setback. Bitcoin once fell more than 5.5% to below $60,000.
Bitcoin's previous halving occurred in 2012, 2016, and 2020, respectively. Some cryptocurrency investors have pointed out that Bitcoin's rebound after the previous halving indicates that this halving will boost the price of Bitcoin. However, J.P. Morgan analysts believe that after the halving, the price of Bitcoin may fall because the market is still overbought. Deutsche Bank analysts also don't think that the price of Bitcoin will rise sharply after the halving, because this incident has already been digested by the market.
Andrew O'Neill, a cryptocurrency analyst at S&P Global, also said he had some doubts about the price predictions he could get from the previous halving because “this is just one of many factors driving the price of Bitcoin.” Moh Siong Sim, a foreign exchange strategist at Bank of Singapore, said, “I think the market is currently in a safe-haven mode.” This means that Bitcoin, as a risky asset, may be shunned by investors.