Bitcoin halving (lack of) fundamentals

Written by Ryan Watkins & Jack Purdy

Will the upcoming halving be the catalyst for the next Bitcoin bull run?

This question has become a lightning rod for the cryptocurrency industry and is at the heart of what will be one of the most talked about events in 2020. Bitcoin’s block reward will halve from 12.5 to 6.25 BTC per block sometime in May and lower Bitcoin’s annual issuance rate to 1.8%. The event will solidify Bitcoin's narrative as one of the scarcest monetary assets in existence alongside gold (hence the “Digital Gold” moniker) as its inflation rate falls below the U.S. target rate.

There have been countless theories advanced to understand the potential price impact of the halving; however, given the lack of historical data points to learn from (n of 2 does not lead to statistically significant results!) and the complexity and evolving nature of cryptocurrency markets, there remains no consensus on what to expect. While we can’t accurately predict what will happen, we can at least debunk some popular theories for the upcoming halving.

Our findings show popular bull theories for the halving have little fundamental basis and that the event is a self-fulfilling prophecy at best.

The Efficient Market Hypothesis