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Bitwise Chief Investment Officer Matt Hougan offered a long-term view on the Bitcoin halving based on historical data and spot ETF demand.
Speaking with CNBC on April 19, Hougan regarded this year’s Bitcoin (BTC) halving as a “buy the news” opportunity for investors interested in the world’s biggest cryptocurrency asset class.
“If you look historically at halvings, the price action within a week or two after the Bitcoin halving is relatively muted. But if you look out at a year, BTC prices have rallied substantially after each of the past three halvings and I think it will do so again.”
Matt Hougan, Bitwise CIO
BTC halving progress chart | Source: bitbo.io
The halving is a pre-installed code change designed by anonymous Bitcoin creator Satoshi Nakamoto to throttle BTC inflation and maintain supply scarcity. Nakamoto built the system to slash mining rewards by 50% every 210,000 blocks or four years.
As block mining rewards are halved, so is the amount of new BTC entering circulation. Many believe this reduced supply, combined with increasing demand through spot Bitcoin ETFs, will result in higher prices by next year. Hougan, whose company is a BTC ETF issuer, sides with this sentiment.
“The amount of new supply of Bitcoin coming into the market is being cut in half. We’re removing $11 billion of annual supply. I think big picture, that has to be good for price and that’s what I would expect over the next year.”
Matt Hougan, Bitwise CIO
BTC inflation charts against monetary valuation | Source: bitbo.io
Bitcoin halving to solidify spot BTC ETF demand
Coinpass CEO Jeff Hancock told crypto.news that Bitcoin has matured from a hobby and speculative market into a real asset with institutional interest. It is bound to make this cycle different, especially in a high inflation, high-interest rate economy, Hancock said.
“A historic market opportunity could present itself this Bitcoin cycle, after the 4th halving event. Bitcoin ETFs have already successfully launched in the US, we now have pending ETFs in Hong Kong, ETNs on the London Stock Exchange, and Bitcoin prices are already pushing all-time highs before the halving, something that has never happened before. Bitcoin’s market future has an unlimited potential in my opinion.”
Jeff Hancock, Coinpass CEOIn Hancock’s view, Bitcoin’s global demand is here to stay well beyond 2024, and tradfi will continue to proliferate crypto’s ecosystem. Spot Bitcoin ETFs have already amassed over $60 billion in assets in less than six months.
The U.K.-registered crypto firm boss added that success with spot BTC ETFs may extend to an Ethereum (ETH) counterpart despite seemingly staunch opposition from the U.S. SEC.
“Institutional demand for Bitcoin is here to stay. Ethereum ETFs could follow in 2024, meaning institutional investors will now have access to staking rewards and decentralized finance through an institutional instrument.”
Jeff Hancock, Coinpass CEO
