Will the Bitcoin Halving Create Overnight Millionaires?

Now that the initial euphoria around the new spot Bitcoin (CRYPTO: BTC) exchange-traded funds (ETFs) has started to fade, it’s time to move on to the next major catalyst for Bitcoin: the halving event in April. According to a growing number of analysts, this could really send its price soaring.

In fact, according to Bitcoin ETF issuer Grayscale (NYSEMKT: GBTC), the impact of this halving could exceed any of the three previous Bitcoin halvings. But is that really the case? There are three key reasons this event might end up disappointing crypto investors.

1. Buy the rumor, sell the news

As we’ve seen with the spot Bitcoin ETFs, the market is getting a lot smarter about pricing in the impact of each new Bitcoin event. If you subscribe to the efficient markets hypothesis, which says that the market efficiently prices in new information about any asset, then this is exactly what you would expect.

In the case of the Bitcoin ETFs, the market had a good grip on when they should come along, as well as which firms were likely to win approval from the Securities and Exchange Commission (SEC). So it didn’t come as much of a surprise when the SEC finally approved the spot Bitcoin ETFs on Jan. 10.

The market had already priced in the effect of this move. In the six months from June 2023 to January 2024, the price of Bitcoin soared in anticipation. Thus, when the news finally came, Bitcoins prices actually headed lower — not higher, as many people had thought. As it turned out, the preliminary gains were a bit too optimistic in the short term.

So, could the same thing happen again, this time with the halving? At the end of last year, some analysts were already starting to predict that some of the halving impact had already been priced in. This makes sense, given how much attention Bitcoin now has from Wall Street and big institutional investors.

The halving is no longer a surprise event for them, as it might have been back in 2012, 2016, or even 2020. It’s a highly predictable thing with several cycles of historical precedent. And the crypto market is no longer as inefficient as it was just a few years ago.

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