A recent panel discussion held at the Swan Pacific Bitcoin festival explored the topic of whether the Bitcoin halving is a truly bullish event or just another narrative that novice investors buy into. The panel, titled “Are halving price cycles bullshit?”, featured industry experts including Marathon Digital CEO Fred Thiel, Swan CIO Ralph Zagury, and Swan product manager Andy Edstrom. The discussion aimed to challenge the conventional belief that the Bitcoin halving is a bullish phenomenon that leads to parabolic increases in BTC price.
The panelists acknowledged that the halving may have had some influence on Bitcoin’s price in the past. However, they questioned whether this effect would continue in the future, considering the numerous bearish events that have occurred in recent years. Nik Bhatia, the host of the panel, initiated the discussion by asking whether the halving is the main driver of the Bitcoin price.
Thiel responded by stating that, in the current cycle, liquidity is the main driver of the Bitcoin price. Zagury agreed, emphasizing that market flow determines price, and the halving itself has no inherent impact on price. Interestingly, Edstrom took a different stance, suggesting that the halving still has a bullish effect on price, although the magnitude of this effect can be debated.
Despite their differing views, all panelists agreed that the influence of the halving may be diminishing over time. Bhatia pointed out that while the halving affects supply, it does not affect demand. However, from a psychological perspective, the halving may still play a role in shaping investor sentiment.
The discussion also touched on the role of derivatives in Bitcoin’s price discovery. Zagury noted that historical data on the halving is insufficient to draw any definitive conclusions. He also highlighted the unique characteristic of Bitcoin, which often trades sideways or experiences downward trends for extended periods. This volatility makes it challenging for investors to hold onto their positions.
When considering the impact of derivatives on Bitcoin’s price, Zagury emphasized the importance of probability. It is impossible to predict Bitcoin’s price with certainty based on historical returns. However, he pointed out that during periods of low liquidity, even a small price movement can lead to a significant jump in price due to short-term sellers being pushed out of the market.
Despite discounting the direct impact of halvings on Bitcoin’s price, all panelists expressed their long-term bullish outlook for the cryptocurrency. They agreed that liquidity would be the key factor driving future price movements. Zagury predicted a resurgence in liquidity, leading to a strong upward price trajectory. Edstrom hinted at potential triggers for increased liquidity, such as the Federal Reserve returning to quantitative easing due to factors like 10-year U.S. Treasuries surpassing 5%, regional bank failures, and banks holding long-duration government debt at a loss.
In conclusion, the panel discussion raised questions about the traditional belief that the Bitcoin halving is a significant driver of price. While opinions varied among the panelists, they agreed that the halving’s impact may be diminishing over time. They also highlighted the role of liquidity and market flow in determining Bitcoin’s future price movements. The discussion provided valuable insights into the ongoing debate surrounding the significance of the halving and the factors that influence Bitcoin’s price.