A recent report by Outlier Ventures is reported to claim that the conventional four-year Bitcoin halving cycle is no longer relevant in impacting the price of Bitcoin. According to the report, the halving events that used to massively influence the coin’s price do not have the same effect anymore as the crypto landscape has evolved with time. This report contrasts the long-believed notion that Bitcoin halving events are moving the needle in the BTC price trajectory.
Outlier Ventures’ Opinion on Bitcoin Halving
Outlier Ventures is a web3 accelerator that released its latest Token Trendlines report, reinforcing that the four-year Bitcoin halving cycle is outdated. The report’s author, Jasper De Maere, Research Lead at Outlier Ventures, analysed Bitcoin price fluctuations since the 2024 halving and reached the conclusion that the impact of halving events has gradually faded out with time.
De Maere noted that 2016 was the last year when Bitcoin halving had a sizable influence on the cryptocurrency’s price. He said, “We believe that 2016 was the last time the halving had a significant, fundamental impact on BTC price action. Since then, the size of the miners’ BTC block reward has become negligible in the context of a maturing and increasingly diversified crypto market.” This output stands against the assumption that halving events are still huge drivers for price changes in Bitcoin.
Shifting Market Drivers
The report states that macroeconomic factors, like the global financial response to the COVID-19 pandemic, have affected the price of Bitcoin more than the Bitcoin halving events in question. The 2020 Bitcoin halving, for example, came at a time when record-breaking capital investments were being made into global markets, which De Maere highlights as a coincidence rather than a direct effect of the halving.
“The strong BTC and crypto market performance following the 2020 halving is a coincidence, as the 2020 halving occurred during a period of unprecedented global capital injection post-Covid, with the U.S. alone increasing its money supply (M2) by 25.3% that year,” De Maere elaborated. This indicates that wider economic trends, instead of halving, were the major movers of Bitcoin’s price fluctuations during that window of time.
ETFs and Demand-Backed Movers
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In addition, another major point discussed in the report is the growing impact of demand-driven factors like the approval of Bitcoin exchange-traded funds (ETFs), which have allegedly outdone the effect of Bitcoin halving. The report states that the approval of a Bitcoin ETF serves as a demand-driven catalyst while halving events represent supply-backed catalysts. Consequently, these two factors are not mutually exclusive, but the demand-driven factors are becoming dominant in guiding Bitcoin’s price movements.
De Maere said, “The BTC ETF approval is a demand-driven catalyst, while the halving is a supply-driven catalyst, making them not mutually exclusive.” This move from supply-based factors like Bitcoin halving to demand-driven market influences is a crucial demarcation for investors and market enthusiasts.
Bitcoin Halving’s Psychological Effect
The report also delineated that even though Bitcoin halving events may still have some psychological effects, their real effect on Bitcoin’s price has become massively irrelevant when compared to other major forces in the market. De Maere added, “While the halving may have some psychological effects, reminding bag holders about their dusty BTC wallets, it’s clear that its fundamental impact has become irrelevant.”
This finding depicts the idea that Bitcoin halving events no longer act as a robust marker of market trends or price fluctuations. Instead, the report indicates that market participants should focus on bigger, more impactful macroeconomic catalysts, such as ETF approvals and wider economic trends, rather than following the conventional four-year halving cycle.
Conclusion
To conclude, Outlier Ventures’ latest report summarizes that Bitcoin halving events are no longer the significant drivers behind moving Bitcoin’s price in the market. The report stresses that the maturation of the cryptocurrency market, along with demand-driven factors like Bitcoin ETFs and macroeconomic influences, has supposedly left the traditional halving cycle behind.
De Maere wrote, “It’s time for founders and investors trying to time the market to focus on more significant macroeconomic drivers rather than relying on the four-year cycle.” Learn more about the movers of BTC prices with TheBITJournal.
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