With Bitcoin's (BTC) next halving just five months away, investors are eager to see whether the event can spark another epic bull market like those of previous years.
Mitchell Askew, chief analyst for Blockware Solutions, is optimistic: not only does he predict further gains, but he also believes that the halving effect will retain its exponential strength in future cycles.
Bitcoin halving compared to price
Askew's theory refutes conventional wisdom and states that both Bitcoin (BTC) and the halving are subject to the law of diminishing returns – that is, the more money invested in an asset, the smaller investors' profits become.
“The price is set on the margin,” Askew wrote in an X post on Monday. “The only trade that counts in determining BTC price is the next one. If there are no other sellers left at $40,000 and the next ask is at $50,000, the price goes up immediately.”
The Bitcoin halving is an event that occurs approximately every four years in which the supply of new BTC issued by the network after each block is reduced by 50%. Given that the crypto market tends to move in four-year cycles, many suspect that the halving is responsible for triggering bull market years through a BTC supply squeeze.
However, many also believe that the multiplier effect caused by these halvings will diminish over time. For example, Bernstein predicted last month that BTC will peak at $150,000 in the next cycle in 2025 due to the “law of large numbers.”
Why Bitcoin can still rise parabolically
Some also believe that cycles will peter out over time as the existing BTC supply becomes so large that future, smaller halvings become irrelevant.
However, according to Askew, this logic is flawed in the context of BTC. as it “does not take into account the amount of available supply, which decreases over time as HODLers accumulate.”
In fact, the accumulation of HODLers on the chain is noticeable. Glassnode data suggests that Bitcoin's “available supply” – defined as coins moved within the last 155 days – is now near historic lows.
Another factor is adoption: With most average citizens still out of touch with BTC, an unprecedented “parabolic” wave of new network participants could still overturn all previous price patterns.
“The total addressable market for BTC includes every gram of wealth/savings in the world,” Askew wrote. “At some point an unimaginably large demand will enter the market.”
The price of Bitcoin rose to $44,500 last week but has since cooled to $41,130 following a mass liquidation on Sunday.
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