Liquidity, not Halving, the Main Driver of Bitcoin’s Price, Experts Suggest
Summary:
At a recent panel discussion at the Swan Pacific Bitcoin Festival, experts debated the true impact of Bitcoin halving on the cryptocurrency's value. The participants, including Marathon Digital's CEO Fred Thiel and Swan's CIO Ralph Zagury, suggested that liquidity might be the main driver of Bitcoin's price rather than halving. Furthermore, the panel emphasized that anticipation around these events is often grounded in speculation and psychology more than fact. Overall, the panelists expressed a positive long-term outlook for Bitcoin's value, indicating liquidity as a likely price catalyst in the future.
The Swan Pacific Bitcoin Festival recently conducted a panel discussion named "Are halving price cycles bullshit?". The founder of Bitcoin Layer, Nik Bhatia, guided the conversation including contributions from Marathon Digital CEO, Fred Thiel, Swan's Chief Investment Officer, Raph Zagury, and Product Manager, Andy Edstrom. The debate focused on the controversy: Is Bitcoin halving really a favourable event or just a story luring inexperienced investors?
The suggestive title of this debate has raised eyebrows, but it indeed intrigues the curiosity of those involved or interested in Bitcoin (BTC) and cryptocurrency investments. A prevalent idea among many investors is the consideration of Bitcoin supply halving as a beneficial event that leads to an almost extreme increase in BTC price. Moreover, investors are looking forward to the possibility of a spot Bitcoin ETF approval and the upcoming halving event in the coming year.
However, the predictions around these events are backed only by historical data rather than any concrete proof. The unpredictability around a highly volatile entity like Bitcoin calls for constant rechecking and reconsideration of these beliefs, especially given the various downgrading events experienced in the previous two years.
On discussing the impact of halving on the Bitcoin price, Thiel and Zagury agreed on liquidity being the main driver rather than halving, which according to them, doesn't necessarily influence the price. In contrast, Edstrom still sees halving as a bullish event impacting the price.
Everyone on the panel coincided that even though halving could stir the market to some extent, its prominence might reduce over time. As per Bhatia, halving affects supply, but its material impact diminishes over time and it doesn't affect demand. Nevertheless, he hinted that the psychological aspect could sway the market.
From all the discussions, one thing that emerged was that the belief around Bitcoin halving impact is mainly a psychological game. Moreover, speculation also has a significant role to play in investing.
On discussing the role of derivatives in the Bitcoin price, the panel concluded that there isn't enough data to precisely predict the outcome. Another unique aspect of Bitcoin was discussed, acknowledging the fact that Bitcoin mostly moves sideways or down in terms of days and makes it quite challenging to hold on to it.
Despite the mild impact of Bitcoin supply halvings, the panel was still optimistic about Bitcoin's future value, with liquidity being the main future price catalyst. They believe the big move in price can occur soon due to the declining liquidity. Bearing signs of early bank failures and the rising amount of banks in debt, they hinted that the Federal Reserve's return to quantitative easing might happen sooner than later.
Although an important discussion, it is to be noted that the content of this article does not serve as investment advice or a recommendation. It is advisable for the readers to conduct their own research due to the risks associated.
Published At
10/18/2023 9:24:55 PM
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