While crypto investors follow 4-year cycles in Bitcoin, the Bitcoin reward halving date is taken as the beginning of the bull.
It is believed that as mining rewards decrease in Bitcoin, this reflects positively on the price and increases in price with scarcity.
In its latest report, Coinbase, the largest US crypto exchange, said that the Bitcoin halving, which is expected to take place in the second quarter of 2024, may have a positive effect on cryptocurrencies and BTC price, but this is not a definite result.
In the report written by David Duong, it was stated that the effect of liquidity, interest rates and the movements of the US dollar should also be examined in order to see the picture clearly about the bull markets experienced after the previous halvings.
In the report, it was stated that the Bitcoin halving had a positive impact on the price as it affected the supply and demand dynamics, but it was difficult to draw a clear model because it should be considered together with other factors.
“The impact of liquidity, interest rates and US dollar movements needs to be unraveled to get a clear picture of how the markets have reacted to previous Bitcoin halvings.
The halving is seen as positive as it affects supply and demand dynamics, but the reasons for the reaction of the markets to the previous three halvings are limited. It is difficult to see a clear pattern of how much these responses are affected by factors such as global liquidity.
Global liquidity has recently peaked and the next halving is 9-10 months away. This data creates uncertainty about how Bitcoin's price movements will clearly respond to the halving."
In a recent report, JP Morgan stated that it expects retail demand for cryptocurrencies to increase as Bitcoin Halving approaches.