Bitcoin's Halving Is Irrelevant for Some Large Traders

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Bitcoin's third halving is less than two weeks away.

Bitcoin halving events occur every four years when block rewards paid to bitcoin miners are cut by 50 percent.

The current block reward of 12.5 BTC will fall to 6.25 BTC in May."The supply shock of the halving is negligible compared to the regular trading volumes of exchanges," said Francis Pouliot, CEO of Canadian over-the-counter bitcoin exchange Bull Bitcoin.

Queries about the May halving have already eclipsed searches for "Bitcoin halving" that took place ahead of bitcoin's second halving in 2016.

Bitcoin options markets reflect a similar hesitation to view the halving as a bullish event.

The put-call open interest ratio has climbed steadily through the month of April, according to data from Skew, which suggests the market is more focused on hedging against bitcoin's downside risk as the halving approaches.

"Most fundamental-based bull cases on the having have little merit, but the halving is a good marketing event," said Ryan Watkins, bitcoin analyst at Messari.

"I'm not confident bitcoin will be able to decouple from other asset classes while macro uncertainty overhangs, at least in the short term and around the halving," said Watkins.

Litecoin and bitcoin cash already experienced similar halving events in August 2019 and April 2020, respectively.

"To argue that bitcoin will rally where its cousin bitcoin cash didn't is similar to saying that the bitcoin market is less efficient. That seems hard to me," said Boonen.