A new report by America’s largest cryptocurrency exchange Coinbase revealed that the effect of Bitcoin halving events on the asset’s performance is still unclear as several exogenous factors play significant roles in the market’s behavior.
While the halving is viewed positively because it is believed to enhance BTC’s prospective scarcity and support its supply-demand dynamics, getting a clear picture of the market’s reaction would require disentangling the effects of U.S. dollar movements, interest rates, and global liquidity.
Unclear Effect of BTC Halving
Bitcoin’s halving happens every four years or every 210,000 blocks. During the event, the block rewards for BTC mining are reduced by 50%. The first halving happened in 2012, and the next, the fourth, is expected to occur between April and May 2024. The upcoming one will reduce BTC’s block rewards from 6.25 BTC to 3.125 BTC per block.
David Duong, Head of Institutional Research at Coinbase, explained in the report that
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