The Bitcoin (BTC-USD) halving is expected to take place this weekend, either on Friday, April 19th or Saturday, April 20th. Commonly referred to as “halving,” the halving is designed to reduce the number of available Bitcoins in circulation once every four years, directly impacting profits for parts of the crypto landscape such as large Bitcoin miners.
Mizuho Securities Managing Director Dan Dolev joins Morning Brief to discuss what the halving could mean for the price of Bitcoin, altcoins, and trading activity on crypto exchanges like Coinbase (COIN).
“The awareness that the halving has right now is several times higher than it was last cycle and definitely like it was two cycles ago,” Dolev tells Yahoo Finance. “Bitcoin was already fully equipped with its type of sell-the-news event at this point…Once the event actually occurs, there will be a race to the exit…”
Want to learn more about the Bitcoin halving? Check out this video from Yahoo Finance for a quick explanation: Bitcoin Halving: Explained
For more expert insights and the latest market activity, click here to watch this full episode of Morning Brief.
This post was written by Luke Carberry Mogan.
Video transcript
SEAN SMITH: With Bitcoin's next halving expected in the coming days, many investors are wondering whether they will experience a similar windfall to previous halvings that saw the price of Bitcoin skyrocket in the following months. But will it be different this time?
Let's ask Dan Dolev. He is the managing director of Mizuho Securities. Dan, it's great to see you. So just talk to us about what you think – at least starting with the halving, before we get into your broader opinion on Bitcoin. But what impact do you see on the price of Bitcoin from the halving?
AND DOLEV: Hello. Thanks for the invitation. Look, I think this time is… I think this time it's actually different, right? Interest rates are higher. It's the third time, so to speak, a charm. People kind of know it's happening, much more so than in previous cycles. And I think all the upside that you've seen in the last few weeks before the downturn shows you that we've already priced it in, and fully priced it in. So I actually expect more downside than upside at this point.
BRAD SMITH: OK. And the downside at this point is that I mean, where else do you think this could actually happen and also have a broader impact on cryptocurrency as a whole? Because if this event brings more disadvantages here, it will take some of the enthusiasm away from the rest of the crypto landscape.
The story goes on
AND DOLEV: 100%. So my concern is mainly with Coinbase, where I have underperformance. And if you think about what happened with Bitcoin, it actually started this whole wave of altcoins. That's a nice way to call them. And they are traded at parity. Or if Bitcoin volume increases, then Altcoin volume also increases. And Coinbase makes a lot of money from the altcoin.
So if Bitcoin continues to lose momentum, it will affect all of these altcoins. And at some point, when people start losing money, which they haven't done so far, they'll be more careful about pricing. And I expect there will be expansion and contraction on the retail side. And that's kind of my bearish view on Coinbase. So I agree with the ripple effect. It'll be pretty bad when it unravels.
SEAN SMITH: Do you think that will happen immediately, Dan?
AND DOLEV: I think we're in it now. I mean, you've seen – the best example is last weekend, right? Geopolitical Concerns: Bitcoin was seen as some sort of safe haven asset, but that wasn't the case. In fact, the Israeli-Iranian situation has been significantly downgraded. So I think we are already in this Bitcoin bear market. And it's starting to happen these days.
BRAD SMITH: Dan, what do you think will happen next? Or how are we doing right now in the breakup that you were talking about, especially when we've just come out of some of these new all-time highs and the halving is expected to lead to even more all-time highs typical valuation – or the typical value movements that we see after previous cycles have seen?
AND DOLEV: Because everyone knows about it now, right? Just like the publicity that the halving is currently having is multiples of what it was last cycle and definitely like two cycles ago. So everyone traded – or the Bitcoin was already fully priced in. And at this point, it's kind of a sell-the-news event. So I don't think there will be a race to the outcome once the event actually takes place.
So that's what I said in this third time, it's a charm. People got used to it, the anticipation was so great. And people dreamed about it – and drummed up support for the event. And now it's like going the other way. Therefore, I expect this major news selling catalyst to come in the next few weeks. But here too, my main concern is Coinbase. Bitcoin is obviously a big driver of that, so I kind of have to follow what's going on with Bitcoin.
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