Bitcoin’s highly anticipated halving event is drawing closer, and investors are eagerly speculating whether it will ignite another remarkable bull market like those seen in the past. Mitchell Askew, Head Analyst for Blockware Solutions, believes that not only will the halving bring forth further gains, but its impact will continue to maintain exponential strength in future cycles. This theory challenges the conventional wisdom that the law of diminishing returns applies to both Bitcoin and the halving, suggesting that increased investment in the asset leads to decreasing profitability for investors. In this article, we will delve into Askew’s claims and explore the potential of the Bitcoin halving as a catalyst for future bull markets.
The Bitcoin halving is a significant event that occurs approximately every four years, reducing the supply of new BTC issued by the network by 50% after each block. As the crypto market tends to operate in cycles of four years, many speculate that the halving plays a crucial role in kickstarting bull market years through a squeeze on BTC supply. However, skeptics argue that the multiplier effect caused by these halvings will diminish over time. Bernstein, for instance, predicted that BTC would reach its peak in the next cycle at $150,000 in 2025 due to the law of large numbers.
Despite the doubts surrounding the future effectiveness of the halving, Askew believes that this skepticism fails to consider crucial factors in the context of BTC. He argues that the logic overlooks the decreasing supply of BTC over time as hodlers accumulate. On-chain data from Glassnode supports this claim, showing that Bitcoin’s “available supply,” defined as coins that have moved within the past 155 days, is currently at historic lows. This accumulation by hodlers results in a scarcity of available coins in the market.
Another essential factor to consider is the potential for mass adoption. With the majority of the population still unfamiliar with BTC, a massive influx of new users into the network could disrupt previous price patterns. Askew refers to this scenario as an unprecedented “parabolic” wave of new network entrants that could drive the demand for Bitcoin to unimaginable heights. He emphasizes that the total addressable market for BTC is the entire world’s wealth and savings, suggesting that an immense amount of demand will inevitably penetrate the market.
Bitcoin experienced a surge in price, reaching $44,500 last week. However, it has since cooled down to $41,130 after a mass liquidation event on Sunday. This volatility exemplifies the unpredictability and fluctuations commonly observed in the cryptocurrency market.
Despite prevailing skepticism, Mitchell Askew’s optimistic outlook on the Bitcoin halving as a catalyst for future bull markets brings hope to investors. He challenges the notion of diminishing returns and argues that the decreased supply of BTC over time, coupled with potential mass adoption, could result in unprecedented demand and subsequent price increases. As we await the next Bitcoin halving, it is evident that the market’s future remains uncertain. The only certainty is that the crypto industry will undoubtedly continue to fascinate and surprise us with its potential for growth and innovation.
