Bitcoin's halving, a process that halves the increase in Bitcoin (BTC) supply every four years, is generally regarded as a bullish catalyst for the price. However, the recent approval of spot ETFs may have reduced the potential positive impact of the halving, according to analysts.
Historically, halvings have put upward pressure on Bitcoin's price. Previous halving cycles have pushed Bitcoin to new highs. This time, however, strong demand from the spot ETF may have thwarted the rally.
Brian Dixon, CEO of investment firm Off the Chain Capital, stated that demand for Bitcoin has been tremendous since the launch of ETFs. “Once the halving occurs and the supply decreases further, it would be logical to think that the price will appreciate,” he said.
However, FalconX Research Manager David Lawant expressed concerns. “Bitcoin hit an all-time high before the first halving, so there's a little bit of concern that ETFs are pushing demand forward and maybe we're going to linger a little bit where we are,” he said.
Anthony Anderson, founder and CEO of Param Labs and Kiraverse, echoed this sentiment. “Bitcoin ETFs have counteracted the impact of the halving on supply by massively purchasing BTC since the beginning of the year,” he said.
James Seyffart, an ETF analyst at Bloomberg Intelligence, suggested that the halving may not impact ETF flows as well, at least not in the short term, due to already strong demand from investors. “So, if it were to have an impact, it's unlikely to be anything overly impactful in my view,” Seyffart added.
Despite these concerns, many believe the halving will still be a significant catalyst for Bitcoin and ETF flows in the long term. “I think the halving will be one of the best things for Bitcoin since the launch of ETFs,” said Bob Iacchino, co-founder of analysis firm Path Trading Partners.
The hype around the halving could help Bitcoin attract many investors looking for alternative assets to hedge against global macro volatility. “This halving is happening at a time when people are a little uneasy about the risk that Bitcoin protects,” Lawant said, pointing out that many investors are starting to pay more attention to how they will protect their portfolios against any significant changes in the global economy.
*This is not investment advice.
