Bitcoin halving is a bullish event, according to Bitwise CIO Matt Hougan – but there’s a catch
The chief investment officer of crypto fund manager Bitwise says the Bitcoin (BTC) halving is a bullish catalyst.
In a new interview with CNBC Squawk Box host Andrew Sorkin, Bitwise CIO Matt Hougan says the April 19 halving, which will see miners' rewards cut in half, could spark a massive rally based on historical precedent.
However, he predicts that the bullish effects will only be noticeable in the long term.
“I think this is a buy-the-news event if you plan for the long term. When you look at historical halvings, if you look at a week or two weeks, the price action around the halving is relatively muted, but if you look at a year, the Bitcoin price has increased significantly after each of the last three halvings, and that I think it will do it again. I think this can be reconsidered.
The amount of new Bitcoin supply entering the market will be cut in half, losing $11 billion in annual supply. I think the overall look has to be good for the price and that’s what I would expect next year.”
He also believes that spot Bitcoin exchange-traded funds (ETFs) will funnel more liquidity into the best-performing digital asset and increase its value.
“ETFs have enabled professional investors to gain access to this market. It is very difficult for foundations, advisors and family offices to buy Bitcoin via an app. This is much easier with an ETF. So I think the marginal new buyers are in the ETF…
Bitcoin is experiencing both a demand shock from the launch of the ETF and a supply shock from this Bitcoin halving. This is happening at exactly the same time. And that’s a really exciting constellation for the coming year.”
Bitcoin is trading at $63,862 at the time of writing, up slightly in the last 24 hours.
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