The upcoming Bitcoin (BTC) halving, scheduled to take place in just five months, has sparked anticipation among investors. Speculation is rife about whether this event will trigger another epic bull market, similar to those witnessed in the past. Mitchell Askew, the Head Analyst for Blockware Solutions, is particularly optimistic. His theory goes against conventional wisdom, which suggests that Bitcoin and the halving are governed by the law of diminishing returns. According to Askew, the halving’s impact will not only generate more gains this time, but its exponential strength will also endure in future cycles.
Askew challenges the notion that the profitability of Bitcoin diminishes as more money is invested in the asset. In an X post on Monday, Askew explains that the price is determined by the next trade. He provides an example where, if sellers are no longer offering Bitcoin at $40,000 and the next ask is at $50,000, the price will immediately jump up. This theory contradicts the belief that as more money pours into Bitcoin, investors’ profits become smaller.
The Bitcoin halving is a significant event that occurs approximately once every four years. During this event, the supply of new BTC issued by the network is cut by 50% after each block. Given that the crypto market tends to move in four-year cycles, many speculate that the halving is responsible for triggering bull markets. However, there is also a belief that the multiplier effect caused by these halvings will diminish over time. Bernstein, for example, predicts that in 2025, Bitcoin will peak at $150,000 during the next cycle due to the “law of large numbers.”
While some argue that the impact of halvings will diminish over time, Askew disagrees. He argues that this perspective fails to account for the decreasing supply of BTC available over time as HODLers accumulate. On-chain data from Glassnode supports this claim, showing that Bitcoin’s “available supply” (coins that have moved within the past 155 days) is currently at historic lows. Additionally, the potential for a wave of new network entrants, with the majority of average people still having no exposure to BTC, could defy previous price patterns. Askew believes that the total addressable market for BTC is the entire wealth and savings of the world and that an “unfathomable amount of demand” will eventually penetrate the market.
Bitcoin’s price recently experienced significant volatility, reaching a high of $44,500 before subsequently cooling to $41,130 after a mass liquidation event on Sunday. While the short-term market movements are influenced by various factors, the upcoming halving remains a topic of interest for investors, who hope it will ignite another bull market.
As Bitcoin’s next halving approaches, the debate surrounding its potential to spark another bull market intensifies. Mitchell Askew’s unconventional theory challenges the belief in diminishing returns and suggests that the halving’s impact will retain its exponential strength in both the current and future cycles. With the supply of BTC decreasing over time and the potential for a surge in new network entrants, the possibilities for Bitcoin remain vast. While recent price movements indicate volatility, the outcome of the halving and its effect on the market are eagerly anticipated by investors and enthusiasts alike.
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